The Baumol Model Determines the Optimal Cash Balance By

question 48

Multiple Choice

The Baumol model determines the optimal cash balance by:

• A)balancing total costs against opportunity costs.
• B)minimizing total costs of holding cash against trading securities costs.
• C)balancing trading securities costs against total costs.
• D)minimizing total costs less trading costs.
• E)None of the above.

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