Question: Hollywood Shoes would like to maintain their cash account at a minimum level of $66,000, but expect the standard deviation in net daily cash flows

Hollywood Shoes would like to maintain their cash account at a minimum level of $66,000, but expect the standard deviation in net daily cash flows to be $5,600; the effective annual rate on marketable securities to be 6.25 percent per year; and the trading cost per sale or purchase of marketable securities to be $260 per transaction. What will be their optimal upper cash limit? (Round your answer to the nearest dollar amount.) $71,600 $86,614.44 $165,799.20 $90,299.40

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

Related Book