A DI Has Two Assets: 50 Percent in One-Month Treasury

question 100

Multiple Choice

A DI has two assets: 50 percent in one-month Treasury bills and 50 percent in real estate loans.If the DI must liquidate its T-bills today,it receives $98 per $100 of face value;if it can wait to liquidate them on maturity (in one month's time) ,it will receive $100 per $100 of face value.If the DI has to liquidate its real estate loans today,it receives $90 per $100 of face value liquidation at the end of one month will produce $92 per $100 of face value.The one-month liquidity index value for this DI's asset portfolio is

• A).973.
• B).940.
• C).979.
• D)1.06.

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Definitions:

Rejection-Then-Retreat Approach

A persuasive technique where an initially larger request is made knowing it will be rejected so that a smaller request (the desired outcome) seems more reasonable.

Reciprocity

A social principle where positive actions lead to similar responses by others, fostering mutual benefit or exchange.

Consensus

General agreement among the members of a group or community.

Framing

The process of presenting or structuring information and issues in a particular way to influence interpretation or decision making.