Question: The table below indicates the fair market value (that is, value if sold in the ordinary course of business) of assets of two financial institutions,

The table below indicates the fair market value (that is, value if sold in the ordinary course of business) of assets of two financial institutions, and the portion of market value the institution expects to receive for each asset class if it is liquidated on short notice. Compute the liquidity index of each institution and compare the two institutions' liquidity risk

A B portion of market value

77000 60000 100%

680 630 99%

7200 7700 96%

80000 6300 92.5%

7300 510 86%

9900 83000 63.5%

6600 610 42%

Step by Step Solution

★★★★★

3.37 Rating (147 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

Liquidity Index Calculation and Comparison Liquidity Index Formula The liquidity index for each asset class is calculated by dividing the portion of m... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

Northern Virginia Community College HOW MUCH FINANCIAL RISK SHOULD YOU TAKE? Mark D. D'Antonio Nova Southeastern University FORT LAUDERDALE, FLORIDA, U.S.A. Abstract A successful retirement...

The temporary difference approach for recording deferred taxes is an integral part of generally accepted accounting principles. Instructions (a) Indicate whether each of the following independent...

The following are independent situations for Bramwell Corp. 1. Estimated warranty costs (covering a three-year warranty) are expensed for financial reporting purposes at the time of sale but deducted...

The table below indicates the fair market value (that is, value if sold in the ordinary course of business) of assets of two financial institutions, and the portion of market value the institution...

Some background introductions of our target firm, WorldCom. and industry, as well as some macro-economic factors before the bond issue. Explain generally about the needs of capital for WorldCom to...

Hi! at the bottom of the third page, how did they come up with the numbers to plug into the equation in 8. a.? Chapter Eighteen Liability and Liquidity Management Chapter Outline Introduction Liquid...

please help me to solve: determine spencer's federal tax payable for 2020. in determining these amounts, ignore GST,PST, and HST. considerations. couple have three children. All members of the family...

please help me to solve : Determine spencer's federal tax payable for 2020. In determining these amounts, ignore gst, hst, and pst considerations couple have three children. All members of the family...

please help me to solve: Determine spencer's federal ax payable for 2020. In determining these amounts, ignore GST, PST and HST considerations. couple have three children. All members of the family...

select and classify 15 separate transactions as whether and why they are a: 1) Horizontal integration 2) Vertical integration 3) Conglomeration 2015 was a record year for M&A. Global M&A volume hit...

Imagine that you work for FEMA and you are developing an artificial intelligence system to allocate emergency supplies in response to a hurricane emergency. (Do not assume the singularity ). You are...

Richmond Production produces tents that it sells for $64 a unit. Operating at capacity, the company can produce 50,000 tents a year. Costs associated with this level of production and sales are given...

Evaluate the definite integral. 5 6 3 x 2 1 x 2 d x =

International business 1. Describe how violation of the apartheid laws by Western businesses helped improve human rights in South Africa? (10 marks) 2 . Discuss the arguments that are for and against...

An electrically heated process is known to exhibit second-order dynamics with the following parameter values: K = 3 C/kW, T = 3 min,~ = 0.7. If the process initially is at steady state at 70 oc with...

: A restaurant manager has hired you to improve the data management practices of his restaurant. Use an ER diagram to depict the following requirements. The restaurant employs a number of chefs. For...

6 Theory of Machines 5. A shaft carries five masses A, B, C, D and E which revolve at the same radius in planes which are equidistant from one another. The magnitude of the masses in planes A, C and...

Complete the balance sheet and sales information in the table that follows for J. White Industries using the following financial data: Debt ratio: 40% Quick ratio: 0.80 Total assets turnover: 1.5...

The Bookbinder Company has made $150,000 before taxes during each of the last 15 years, and it expects to make $150,000 a year before taxes in the future. However, in 2012 the firm incurred a loss of...

The balance sheet of Roop Industries is shown below. The 12/31/2012 value of operations is $651 million, and there are 10 million shares of common equity. What is the intrinsic price per share?....

1. Have a logical/analytical understanding of what Awareness is

3. What are the personal core values you would include in your touchstone? Use Figure 20.2 to build your own touchstone.

4. How do the core values you have chosen connect to each of the Transpersonal Qualities?