Which one of these is not considered by either the Baumol or the Miller-Orr models? Multiple choice question.

Firms prefer to avoid all short-term borrowing due to its cost. 

Transaction costs have risen noticeably since the models were created.

A compensating balance requirement may be an average value, not a set minimum requirement.

A firm may have a compensating balance requirement below which the firm's bank account may not fall

Answer rating: 100% (QA)

The detailed answer for the above question is provided below Th... View the full answer