A Depository Institution (bank) has $ 1 Billion in assets and 10% capital. It has funded itself
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Question:
A Depository Institution (bank) has $ 1 Billion in assets and 10% capital. It has funded itself through capital, checking accounts ($ 450 million) with an average duration of one (1) month and short-term Certificates of Deposit ($ 450 million) with an average duration of 3 months and an average maturity of 6 months.
What is the average duration of its liabilities?
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