Which of the Following Is True in the BAT Model

question 79

Multiple Choice

Which of the following is true in the BAT model?

• A) As the initial cash balance rises, opportunity costs fall.
• B) For a given initial cash balance, the total cost of holding cash will rise with decreases in opportunity costs.
• C) As average cash balances fall, opportunity costs rise.
• D) For a given initial cash balance, the total cost of holding cash will rise with decreases in the fixed cost of making a securities trade.
• E) A drawback to the BAT model is that it assumes steady, certain cash outflows.

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Definitions:

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