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cloveb cloveb
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Posts: 782
Rep: 62 1
7 years ago
A DI has two assets: 50 percent in 1-year Treasury bonds 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 year’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. For every $100 face value of real estate loans, the DI will receive $90 if it liquidates them at the end of one month, and $95 if liquidating at the end of one year. The one-year liquidity index value for this DI’s asset portfolio is

A. 0.940
B. 0.964
C. 0.979
D. 1.06
E. 1.10
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bolbolbolbol
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#1
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7 years ago
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