A DI has the following assets in its portfolio: $10 million in cash reserves with the Fed,

Question:

A DI has the following assets in its portfolio: $10 million in cash reserves with the Fed, $25 million in T-bills, and $65 million in mortgage loans. If the DI has to liquidate the assets today, it will receive only $98 per $100 of of the T-bills and $90 per $100 of of the mortgage loans. at the end of one month (closer to maturity) will produce $100 per $100 of of the T-bills and $97 per $100 of of the mortgage. Calculate the one-month liquidity index for this DI using the above information.
Face Value
Face value is a financial term used to describe the nominal or dollar value of a security, as stated by its issuer. For stocks, the face value is the original cost of the stock, as listed on the certificate. For bonds, it is the amount paid to the... Liquidation
Liquidation in finance and economics is the process of bringing a business to an end and distributing its assets to claimants. It is an event that usually occurs when a company is insolvent, meaning it cannot pay its obligations when they are due....