Consider the Following Situation: an FI Holds 40 Per Cent

question 7

Multiple Choice

Consider the following situation: an FI holds 40 per cent of its assets in liquid securities with a fair market value of $100 and the remaining 60 per cent of its assets in housing loans with a fair market value of $500.Further assume that in case of immediate liquidation, the FI would receive $90 for its liquid securities and $450 for its housing loans.What is the FI's liquidity index (round to two decimals) ?

• A)0.19
• B)0.54
• C)0.67
• D)0.90

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Definitions:

Glucocorticoids

A class of steroid hormones that play a role in glucose metabolism, inflammation suppression, and immune system regulation.

Gluconeogenesis

The metabolic process that generates glucose from non-carbohydrate sources, critical for maintaining blood sugar levels.

Glycogenolysis

The biochemical process of breaking down glycogen into glucose, providing a source of energy as needed by the body.

Parathyroid Hormone

This is a compound released by the parathyroid glands, responsible for managing blood calcium concentrations.