MrPierpont Has Wealth of $200,000

question 59

Multiple Choice

Mr.Pierpont has wealth of $200,000.He wants to keep at least $80,000 in bonds at all times and will shift $10,000 into bonds from his chequing account for each percentage point that the interest rate on bonds exceeds the interest rate on his chequing account.If the interest rate on chequing accounts is 4% and the interest rate on bonds is 9%,how much does Mr.Pierpont keep in his chequing account?

• A)$50,000
• B)$70,000
• C)$130,000
• D)$150,000

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Definitions:

World Bank

Organization established by industrialized nations to lend money to less-developed countries.

Financial Crisis

A situation where the value of financial institutions or assets drops significantly and is often accompanied by panic in the financial markets and a lack of liquidity.

Quotas

Limits set on the quantity of a product that can be imported or exported during a given timeframe, used as a trade policy tool.

Specified Time Periods

Designated or clearly defined intervals of time within which certain actions are performed or conditions are to be met.