QUESTION 8 A financial intermediary has two assets in its investment portfolio. It has 35 percent of its security portfolio invested in one-month Treasury bills and 65 percent in real estate loans. If it liquidated the bills today, the bank would receive $95 per hundred of face value. If the real estate loans were sold today, they would be worth $85 per hundred of face value. In one month, the real estate loans could be liquidated at $96 per hundred of face value and the bills would be worth $100 per hundred of face value. What is the intermediary's one-month liquidity index? 0.93 0.95 0.91 0.87 0.85

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
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Chapter1: Investments: Background And Issues
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QUESTION 8
A financial intermediary has two assets in its investment portfolio. It has 35 percent of its security portfolio invested in one-month Treasury bills and 65
percent in real estate loans. If it liquidated the bills today, the bank would receive $95 per hundred of face value. If the real estate loans were sold today,
they would be worth $85 per hundred of face value. In one month, the real estate loans could be liquidated at $96 per hundred of face value and the bills
would be worth $100 per hundred of face value. What is the intermediary's one-month liquidity index?
0.93
0.95
0.91
0.87
0.85
Transcribed Image Text:QUESTION 8 A financial intermediary has two assets in its investment portfolio. It has 35 percent of its security portfolio invested in one-month Treasury bills and 65 percent in real estate loans. If it liquidated the bills today, the bank would receive $95 per hundred of face value. If the real estate loans were sold today, they would be worth $85 per hundred of face value. In one month, the real estate loans could be liquidated at $96 per hundred of face value and the bills would be worth $100 per hundred of face value. What is the intermediary's one-month liquidity index? 0.93 0.95 0.91 0.87 0.85
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