The Optimal Amount of the Firm's Liquid Asset Balance to Be

question 15

Multiple Choice

The optimal amount of the firm's liquid asset balance to be invested in marketable securities is a function of

• A)the interest earned over the expected holding period
• B)the transaction cost involved in buying and selling the securities
• C)the spread between long-term and short-term interest rates
• D)the interest earned over the expected holding period and the transaction cost involved in buying and selling the securities