Consider the Following Situation: an FI Holds Two Assets in Equal

question 68

Multiple Choice

Consider the following situation: an FI holds two assets in equal proportions, these being liquid securities with a fair market value of $200 and housing loans with a fair market value of $800.Further assume that in case of immediate liquidation, the FI would receive $185 for its liquid securities and $700 for its housing loans.What is the FI's liquidity index (round to two decimals) ?

• A)I = (185/200) + (700/800) = 1.80
• B)I = (185/200) * (700/800) = 0.81
• C)I = 0.5 * (185/200) + 0.5 * (700/800) = 0.90
• D)I = [0.5 * (185/200)] * [0.5 * (700/800)] = 0.20

---

Definitions:

Third Degree

Relates to the most severe classification of burns, involving full thickness damage through all layers of the skin, leading to significant injury.

Solar Keratosis

A rough, scaly patch on the skin caused by years of sun exposure, often considered a precancerous growth.

Ritalin

A stimulant medication commonly used to treat attention deficit hyperactivity disorder (ADHD) and certain sleep disorders.

Adverse Effect

An unexpected, bad result; also known as an adverse reaction. The harm a patient experiences by a medication that has been prescribed by a health care professional and taken as instructed; an unexpected reaction to a drug taken for therapeutic purposes.