Laura Has a $100,000 Balance in Her Checking Account at Best

question 52

Multiple Choice

Laura has a $100,000 balance in her checking account at Best Bank, and she has purchased a certificate of deposit (CD) worth $50,000 issued by Best Bank. Laura is also thinking of investing $200,000 either in Best Bank or in Trust Bank. Which of the following is a suitable strategy for Laura if she wants her deposits to be completely insured?

• A) Laura should invest $200,000 in a money market deposit account (MMDA) of Best Bank.
• B) Laura should invest $100,000 in a money market deposit account (MMDA) of Best Bank and invest $100,000 in an asset management account of Best Bank.
• C) Laura should invest $100,000 in a money market deposit account (MMDA) of Best Bank and invest $100,000 in an asset management account of Trust Bank.
• D) Laura should invest $150,000 in a money market deposit account (MMDA) of Best Bank and invest $100,000 in an asset management account of Trust Bank.
• E) Laura should invest $150,000 in a money market deposit account (MMDA) of Best Bank and invest $200,000 in a money market deposit account (MMDA) of Trust Bank.

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Definitions:

Changing

Refers to the process of making something different from what it was before.

Immediate Outcomes

The direct results or effects that occur as a consequence of an action or event.

Omission Bias

The inclination to perceive actions that cause harm as more negative or morally inferior compared to equally damaging failures to act (omissions).

Relationship

Relates to the way in which two or more people or things are connected, or the state of being connected.