The average maturity of the liabilities of an FI's balance sheet is equal to
A)the weighted-average of the liabilities where the weights are determined relative to the total liabilities and equity of the FI.
B)the weighted-average of the liabilities where the weights are determined relative to the total liabilities of the FI.
C)the weighted-average of the liabilities where the weights are determined relative to the total assets of the FI.
D)the weighted-average of the liabilities where the weights are determined using market values of liabilities.

Question

Quizplus · Accepted Answer

The average maturity of the liabilities of an FI's balance sheet is equal to the weighted-average of the liabilities where the weights are determined relative to the total liabilities of the FI. This means that the calculation only takes into account the liabilities of the FI, not the equity or total assets.

The Average Maturity of the Liabilities of an FI's Balance