A bank is trying to measure its ability to quickly sell some securities if it runs...

Transcribed Image Text:

A bank is trying to measure its ability to quickly sell some securities if it runs into a liquidity problem. Given the following information, calculate the immediate, one-week, two-week and one-month liquidity index for the bank's securities. Dollar Percent of face value received if sold Asset Amount Immediately One week Two weeks One month Cash 25 100 100 100 100 T-bills 50 97.5 99 100 100 Corporate bonds 65 95 97.5 98 99 Municipal bonds 20 90 92.5 95 97 Mortgages 90 80 88 93 97 Total 250 A bank is trying to measure its ability to quickly sell some securities if it runs into a liquidity problem. Given the following information, calculate the immediate, one-week, two-week and one-month liquidity index for the bank's securities. Dollar Percent of face value received if sold Asset Amount Immediately One week Two weeks One month Cash 25 100 100 100 100 T-bills 50 97.5 99 100 100 Corporate bonds 65 95 97.5 98 99 Municipal bonds 20 90 92.5 95 97 Mortgages 90 80 88 93 97 Total 250