-What Is the Weighted Average Maturity of Liabilities?
A)5

question 91

Multiple Choice

$$\begin{array} { | l | r | l | l | r | l | } \hline \text { Assets } & \begin{array} { l } \text { Amount } \\\text { (\$ millions) }\end{array} & \begin{array} { l } \text { Annual } \\\text { Rate }\end{array} & \text { Liabilities } & \begin{array} { l } \text { Amount } \\\text { (\$ millions) }\end{array} & \begin{array} { l } \text { Annual } \\\text { Rate }\end{array} \\\hline \text { 1-year bonds } & \$ 60 & 7 \% & \text { 1-year CD } & \$ 50 & 5 \% \\\hline \text { 10-year loan } & \$ 40 & 12 \% & \text { 2-year CD } & \$ 40 & 6 \% \\\hline & & & \text { Equity } & \$ 10 & \\\hline \text { Total } & \$ 100 & & \text { Total } & \$ 100 & \\\hline\end{array}$$
-What is the weighted average maturity of liabilities?

• A)5.50 years.
• B)6.40 years.
• C)1.44 years.
• D)1.30 years.
• E)1.10 years.

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Definitions:

Liquid

A liquid is a state of matter that is fluid and conforms to the shape of its container but retains a constant volume independent of pressure.

Mercury

A chemical element with symbol Hg and atomic number 80, known for being a liquid metal at room temperature and for its toxicity.

Room Temperature

The ambient temperature of a room, generally considered to be between 20 to 25 degrees Celsius (68 to 77 degrees Fahrenheit).

Sodium Sulfate

An inorganic salt used in detergents, paper manufacturing, and glass production, known chemically as Na2SO4.