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Question 3: 5 marks) Suppose you get a monthly paycheck of $ 4000 which is automatically deposited at the beginning of each month into a

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Question 3: 5 marks) Suppose you get a monthly paycheck of $ 4000 which is automatically deposited at the beginning of each month into a checking account. You will spend the entire $ 4000 each month, but you can transfer funds into bonds that earn 1% interest each month. Transferring between bonds and money requires you to pay a $2.50-per-transfer charge. Use the following table to calculate Your optimal money demand net profit. Number of Switches 0 Average Money Holdings Average Bond Holdings Interest Earned Cost of Switching Net Profit INM FOR00

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