An S&L owns mortgages that have a current market value of $325 million. The duration of this portfolio of mortgages is 15.9 years
The S&L finances its mortgages by issuing CDs and the current value of these liabilities is $275 million. The duration of these liabilities is 4.6 years. What is the initial duration of the equity for the S&L?
A) 103.25 years
B) 78.05 years
C) 25.30 years
D) 53.00 years
Answer: B
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Which of the following statements is true regarding the labor planning problem?
A) It is typically a maximization problem. B) Required labor hours translate into less-than-or-equal-to constraints. C) The decision variables can include how many full- and part-time workers to use. D) The problem is only unique to banks. E) None of the above
Suppose the ages of students in Statistics 101 follow a right skewed distribution with a mean of 23 years and a standard deviation of 3 years. If we randomly sampled 100 students, which of the following statements about the sampling distribution of the sample mean age is incorrect?
A) The standard error of the sampling distribution is equal to 0.3 years. B) The standard deviation of the sampling distribution is equal to 3 years. C) The shape of the sampling distribution is approximately normal. D) The mean of the sampling distribution is equal to 23 years.