The Following Is an FI's Balance Sheet ($Millions)

question 79

Multiple Choice

The following is an FI's balance sheet ($millions) . Notes to Balance Sheet: Munis are 2-year 6 percent annual coupon municipal notes selling at par. Loans are floating rates, repriced quarterly. Spot discount yields for 91-day Treasury bills are 3.75 percent. GICs are 1-year pure discount certificates of deposit paying 4.75 percent.
What is the duration of the municipal notes (the value of x) ?

• A)1.94 years.
• B)2.00 years.
• C)1.00 years.
• D)1.81 years.
• E)0.97 years.

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Definitions:

Bottom-up Processing

An approach to information processing that starts with details or sensory data and builds up to a comprehensive perception.

Sensory Receptors

Specialized cells or nerve endings that respond to environmental stimuli, such as light, sound, touch, or chemicals, and convert them into neural impulses.

Umami

One of the five basic tastes, characterized by a savory or meaty flavor, often associated with glutamates.

Meaty Taste

Often referred to as "umami," it is one of the five basic tastes, characterized by a savory or brothy flavor commonly found in cooked meats, mushrooms, and some vegetables.