Question
Can you please explain the answers and maths behind the following 2questions - don't understand why 50 is C and 51 is D Use the
Can you please explain the answers and maths behind the following 2questions - don't understand why 50 is C and 51 is D
Use the following balance sheet information to answer questions 5059. All assets and liabilities are currently priced at par and pay interest annually.
Assets( millions)Liabilities ( millions)
1-year 7 percent coupon bonds601-year 5 percent interest rate CD50
10-year 12 percent loan402-year 6 percent interest rate CD40
Equity10
100100
50What is the weighted average maturity of assets?
Da.5.50 years
b.6.40 years
c.5.00 years
d.4.60 years
e.10.0 years
51What is the weighted average maturity of liabilities?
Ca.5.50 years
b.6.40 years
c.1.44 years
d.1.30 years
e.1.10 years
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