Which of the following statements is CORRECT?

A. Most firm's cash balances consist of transactions, compensating, precautionary, and speculative balances, and the optimal total cash balance is found as the sum of the amounts needed for each of these purposes.

B. Some firms choose to hold highly liquid, short-term securities as a substitute for demand deposits because securities earn interest and can be quickly converted to cash should cash be needed.

C. The better a firm's access to low-cost borrowed funds, the higher its precautionary cash balances should be, because such balances protect its access to these funds.

D. Firms today are more likely to rely on cash than on reserve borrowing power or marketable security holdings for speculative purposes because of the increased need to move quickly in today's dynamic economy.

E. If a firm can get its customers to permit it to pay by direct transfers (wire transfers or debits to its bank account) rather than paying by check, this will speed up the firm's payments and optimize its cash management procedures.