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Consider a Financial Institution with the following assets and liabilities. Asset A has a maturity of...

Consider a Financial Institution with the following assets and liabilities. Asset A has a maturity of 3 years and a market value of $40,000 and asset B has a maturity of 6 years and a market value of $90,000. Liability A has a maturity of 2 years and a market value of $60,000 and liability B has a maturity of 12 years and a market value of $50,000. What is the maturity gap of this FI (round your answer to two decimals)?

Group of answer choices1.47 years

- 1.25 years.

-1.47 years.

5 years.

- 5 years.

Solutions

Expert Solution

Maturity gap of this FI = Average Maturity of Assets - Average Maturity of Liability

Maturity gap of this FI = 5.08 - 6.55

Maturity gap of this FI = 1.47 Years Option B

jeff jeffy answered 2 years ago
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