The Target Cash Balance Is Reached When

question 9

Multiple Choice

The target cash balance is reached when:

• A) the interest on any marketable security throw-off is maximized.
• B) the interest foregone from not investing in an equivalent amount of Treasury bills is minimized.
• C) the value of cash liquidity equals interest foregone on an equivalent amount of Treasury bills.
• D) the liquidity value is greater than interest foregone on an equivalent amount of Treasury bills.

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Definitions:

Amplitude

The magnitude or intensity of a fluctuating signal, measured from the average or rest position to the peak.

Loudness

A subjective perception of the intensity of a sound, influenced by its amplitude and frequency, and how it is received and interpreted by the ear and brain.

Frequency

How often something happens within a certain period or within a specific sample.

Moon Illusion

A perceptual phenomenon where the moon appears larger when it is closer to the horizon than when it is higher in the sky.