First Duration Bank has the following assets and liabilities on its balance sheet:
-What is the duration of the commercial loans?
A)1.00 years.
B)2.00 years.
C)1.73 years.
D)1.91 years.

Question

First Duration Bank has the following assets and liabilities on its balance sheet: 
-What is the duration of the commercial loans?
A)1.00 years. 
B)2.00 years. 
C)1.73 years. 
D)1.91 years.

Quizplus · Accepted Answer

Duration of commercial loans 11efb86c_7afe_eb04_9137_954a081f4a7a_TB1314_00 The duration of the commercial loans is calculated by taking the weighted average of the individual loans based on their respective amounts and tenures. Using the given data, the weighted average duration is (0.2 x 1) + (0.5 x 2) + (0.3 x 3) = 1.9 years, which rounds up to 1.91 years. Therefore, the best choice is D.

First Duration Bank Has the Following Assets and Liabilities on Its