(TCO E & F) A bank has three assets. It has $75 million invested in consumer loans with a 3 year duration, $39 million invested in T-Bonds with a 16 year duration and $39 million in 6 month maturity T-Bills. What is the duration of the bank's asset portfolio in years? Group of answer choices 3.95 years 4.83 years 6.50 years 7.38 years 11.51 years

6.50 years

Explanation:

Data provided in the question:

Amount invested in consumer loans = $75 million

Duration of consumer loan = 3 year

Amount invested in T-Bonds = $39 million

Duration of T-Bonds = 16 year

Amount invested in T-Bills = $39 million

Duration of T-Bills = 6 months

Now,

The duration of the bank's asset portfolio in years

=

= 6.50

Hence,

The answer is option 6.50 years

rational decision making is a multi-step process for making choices between alternatives. the process of rational decision making favors logic, objectivity, and analysis over subjectivity and insight. the word “rational” in this context does not mean sane or clear-headed as it does in the colloquial sense.

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