Jim Has the Following Assets and Liabilities: Which of the Following

question 28

Multiple Choice

Jim has the following assets and liabilities: Which of the following actions would increase Jim's money demand by $200?

• A) Jim writes a check for $200 to pay down his credit card balance.
• B) Jim writes a check for $200 to pay down her car loan balance.
• C) Jim pays $200 cash for a new lamp.
• D) Jim gets a $200 cash advance on his credit card and puts the proceeds in his checking account.

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Definitions:

Asset Allocation Fund

A mutual fund that spreads its investments across various asset classes, aiming to reduce risk through diversification.

Sector Fund

A mutual fund that invests exclusively in a particular sector of the economy, such as technology, health care, or finance.

Money Market Funds

Mutual funds that invest in short-term debt securities such as government bonds, treasury bills, and commercial paper, offering investors liquidity and safety.

NAV

NAV, or Net Asset Value, represents the per-share market value of a fund's assets minus its liabilities, crucial for evaluating investment funds.