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National Co. would like to maintain its cash account at a minimum level of P25,000, but expect the standard deviation in net daily cash flows to be P2,000; the effective annual rate on marketable securities to be 7.5% per year, and the trading cost per sale or purchase of marketable securities to be P200 per transaction. What will be their optimal upper cash limit *

National Co. would like to maintain its cash account at a minimum level of P25,000, but expect the standard deviation in net daily cash flows to be P2,000; the effective annual rate on marketable securities to be 7.5% per year, and the trading cost per sale or purchase of marketable securities to be P200 per transaction. What will be their optimal upper cash limit *

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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National Co. would like to maintain its cash account at a minimum level of P25,000, but expect the standard deviation in net daily cash flows to be P2,000; the effective annual rate on marketable securities to be 7.5% per year, and the trading cost per sale or purchase of marketable securities to be P200 per transaction. What will be their optimal upper cash limit * Format: 111,111.11
Transcribed Image Text:National Co. would like to maintain its cash account at a minimum level of P25,000, but expect the standard deviation in net daily cash flows to be P2,000; the effective annual rate on marketable securities to be 7.5% per year, and the trading cost per sale or purchase of marketable securities to be P200 per transaction. What will be their optimal upper cash limit * Format: 111,111.11
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