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

Compute liabilities and recognize obligations related to employee service.

Understand the fundamental concepts of portfolio management, including the roles of beta, standard deviation, and nonsystematic variance.

Grasp the significance of forecast quality in improving portfolio management and the implications of low R-squared values.

Comprehend the components and applications of the Treynor-Black model.

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Definitions:

Peer Approval

The acceptance or recognition one receives from their peers or contemporaries, often influencing behavior and self-esteem.

Prefrontal Cortex

The front part of the frontal lobes of the brain, implicated in complex cognitive behavior, personality expression, decision making, and moderating social behavior.

Limbic System

A complex system of nerves and networks in the brain, involving several areas near the edge of the cortex concerned with instinct and mood. It controls basic emotions (such as fear and pleasure) and drives (such as those for food and sex).

Basal Ganglia

The basal ganglia are a group of nuclei in the brain involved in controlling movement and coordination, as well as aspects of learning and emotional response.