What Effect Does Increasing the Standard Deviation in Daily Cash

question 18

Multiple Choice

What effect does increasing the standard deviation in daily cash flows have on the cash return point in the Miller-Orr model?

• A) It will cause the cash return point to increase.
• B) It will cause the cash return point to decrease.
• C) It has no impact on the cash return point.
• D) It will cause the cash return point to first increase, then decrease.

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