Use the Table for the Question(s)below

question 81

Multiple Choice

Use the table for the question(s) below.
-If the risk-free rate of interest is 7.5%,then the value of security "A" is closest to:

• A)$91.00.
• B)$92.50.
• C)$93.00.
• D)$100.00.

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Definitions:

Book Balance

The amount of money shown in a company's financial records, excluding any pending transactions.

Bank Cash

The amount of cash that a bank has in its vaults and with the central bank; also a term used to describe readily available funds.

Float

The total number of shares publicly available for trading in the stock market, excluding those held by insiders, the company, or other restricted entities.

Miller-Orr Model

A mathematical model used in finance to manage cash flow and determine the optimal level of cash balances for a firm.