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

question 121

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.

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Definitions:

Income

Monetary payment received for work or through investments.

Interest Rate

The fraction of a loan that incurs interest costs for the borrower, usually described as an annual percentage rate.

Utility Function

A mathematical representation of how a consumer's satisfaction or preference for goods and services is dependent on their consumption levels.

Consumption

The use of goods and services by households, affecting economic conditions and indicating economic health through consumer spending patterns.