How much is the target cash balance

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Reference no: EM131968217

XYZ has set the lower limit on its cash at $12,000. Its monthly standard deviation of net cash flows is $1,500. The interest rate earned on it investments is 3.6% per annum. Each transaction to buy or sell securities is $35. a. How much is the target cash balance C*? b. How much is the upper cash balance. Use the Miller-Orr Model, please show all work.

Reference no: EM131968217

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