Consider the following situation:

A bank holds 40 per cent of its assets in liquid securities with a fair market value of $100 and the remaining 60 per cent of its assets in housing loans with a fair market value of $500. Further assume that in case of immediate liquidation, the bank would receive $90 for its liquid securities and $450 for its housing loans.

What is the banks liquidity index?

Select one:

a.

0.90

b.

0.67

c.

0.19

d.

0.54