Question

ABC Company has a policy of maintaining a minimum cash balance of TK 165000 the standard deviation of the company's daily cash flows is TK 120000 The annual interest rate is 18%. The transaction cost of buying or selling securities is 120 per transaction Based on Miller-Orr Model Determine the following..

i ) The upper control limit and return point.
ii ) The average cash balance
iii ) How much marketable securities ABC should buy and sell to maintain the lower and the upper limit​

Answer 1

Explanation:

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