Duration Bank Has the Following Assets and Liabilities as of Year-End

question 76

Multiple Choice

Duration Bank has the following assets and liabilities as of year-end. All assets and liabilities are currently priced at par and pay interest annually. What is the weighted average maturity of the liabilities of the FI?

• A)3.67 years.
• B)3.30 years.
• C)3.00 years.
• D)5.00 years.
• E)4.33 years.

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Definitions:

Trend

A general direction in which something is developing or changing, often analyzed in data over time.

Net Operating Income

A financial metric that measures a company’s profitability from its core business operations, excluding non-operating income and expenses.

Income Before Taxes

The profit a company generates from its operations before tax obligations are deducted.

Interest

The cost of borrowing money or the return on investment, typically expressed as a percentage of the principal amount.