A fiRm Uses the Miller-Orr Model with a Minimum Balance

question 87

Multiple Choice

A firm uses the Miller-Orr model with a minimum balance of €10, a maximum of €80, and a target balance of €40.If the cash balance was to hit €10, what would the firm do?

• A)Buy €10 in marketable securities.
• B)Buy €30 in marketable securities.
• C)Sell €30 in marketable securities.
• D)Sell €60 in marketable securities.
• E)None of the above.

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Definitions:

Supercomputers

Extremely powerful computers with high computational capacity, used for complex tasks such as climate research, bullet simulations, and quantum mechanics.

Legacy Systems

Older technology systems, software, or applications that are still in use, despite the availability of newer versions.

Cloud Computing

The delivery of different services such as storage, databases, servers, networking, software, over the cloud (internet) to offer faster innovation, flexible resources, and economies of scale.

IaaS

Infrastructure as a Service (IaaS) is a cloud computing model that provides virtualized physical computing resources over the Internet, including servers, networking, and storage.