Question
A firm is considering its cash planning based on the following assumptions.Variance of daily cashflows is $1 000 000 .Transaction cost $65 per transaction.Interest rate
A firm is considering its cash planning based on the following assumptions.Variance of daily cashflows is
$1 000 000 .Transaction cost $65 per transaction.Interest rate on deposit 3%.
1. What is the firm optimal cash balance based on the Miller -Orr Model
a.$7402
b.$18 402
c.$8 402
d.$15 405
2. Which of the following are reasons for the free movement of capital across the globe.
i.) Globalization of financial markets
ii.) Advance in technology
iii.) Liberalization of financial markets
iv.) Increase in the number of financial institutions
a.
i. only
b.
i. ii. and iii. only
c.
ii. iii. and iv. only
d.
i. and ii only
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