What is the liquidity index

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Reference no: EM132034333

Consider the following situation: an FI holds 40 per cent of its assets in liquid securities with a fair market value of $100 and the remaining 60 per cent of its assets in housing loans with a fair market value of $500. Further assume that in case of immediate liquidation, the FI would receive $90 for its liquid securities and $450 for its housing loans. What is the FI’s liquidity index (round to two decimals)?

Reference no: EM132034333

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