Home » DJT has $100K to invest in bonds or in money via an interest-earning checking account.

DJT has $100K to invest in bonds or in money via an interest-earning checking account.

DJT has $100K to invest in bonds or in money via an interest-earning checking account. DJT instructs his brokers to invest $50K in bonds and to add $5K more in bonds for every percentage point that the interest rate on bonds exceeds that of his checking account.

(a) 2 points COMPOSE formula that his DJT’s demand for money as a function of the two interest rates.

Demand for money is the quantity of monetary assets people hold in their portfolio. The theory of portfolio allocation implies that the demand for money depends on the expected return.

(b) 2 points What is his demand for bonds equation? And the sum of both money and bond demand

(c) 1 point Suppose everyone is like the DJT, per fixed assets per person at $80K in bonds and $20K in checking. Checking account now pay no interest. What is the equilibrium interest rate on bonds?

Show more

Calculate Your Essay Price
(550 words)

Approximate price: $22

Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
The price is based on these factors:
Academic level
Number of pages
Basic features
  • Free title page and bibliography
  • Unlimited revisions
  • Plagiarism-free guarantee
  • Money-back guarantee
  • 24/7 support
On-demand options
  • Writer’s samples
  • Part-by-part delivery
  • Overnight delivery
  • Copies of used sources
  • Expert Proofreading
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Our guarantees

Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

Read more

Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

Read more

Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.

Read more

Privacy policy

Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.

Read more

Fair-cooperation guarantee

By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.

Read more

Order your essay today and save 10% with the coupon code: best10