Question

What is the weighted average duration of the assets of the FI? 1) 7.25 years 2) 7.75 years 3) 8.25 years 4) 8.75 years 5) 9.25 years

Answer 1

Additional data is required to accurately calculate the weighted average duration of the FI's assets, as it involves summing the products of each asset's duration and its weight within the portfolio.

Step-by-step explanation:

The question appears to involve the concept of weighted average duration, commonly used in finance to assess portfolio or asset management. However, without additional information such as the duration of individual assets and their respective weights within the Financial Institution's (FI) portfolio, it's not possible to calculate the weighted average duration. The weighted average duration would typically be calculated by summing the products of the duration of each asset and its proportion of the total portfolio value.

Answer 2

To calculate the weighted average duration of the assets of an FI, you need the weights and durations of the assets in the portfolio.The correct option is 4.

Step-by-step explanation:

The weighted average duration of the assets of the FI can be calculated by multiplying the duration of each asset by its weight and then summing up these values. Here is how to do it:

1. Assign weights to each asset based on their proportions in the portfolio.
2. Multiply the duration of each asset by its weight.
3. Sum up these values to find the weighted average duration.

Without knowing the weights and durations of the assets, it is not possible to determine the exact answer to the question. The correct option is 4.