A $100,000 Trust Is to Be Invested in Bonds Paying

question 174

Multiple Choice

A $100,000 trust is to be invested in bonds paying 9%, CDs paying 7%, and mortgages paying 10%. The sum of the bond and CD investment must equal the mortgage investment. To earn an $9100 annual income from the
Investments, how much should the bank invest in bonds?

• A) $20,000
• B) $30,000
• C) $28,000
• D) $50,000

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Definitions:

Real GDP

Gross Domestic Product adjusted for inflation, measuring the value of goods and services produced by an economy in a given year, expressed in base-year prices.

Nominal GDP

GDP based on prices prevailing at the time of production.

Price Level

A measure of the average prices of goods and services in an economy at a specific point in time.

Aggregate Demand Curve

A graphical representation showing the relationship between the overall price level in an economy and the total demand for goods and services at that price level.