Which of the following approach for determining the target cash balance assumes that the distribution of daily net cash flows is normally distributed, and allows for both cash inflows and outflows?
A)The Baumol model
B)The Miller-Orr model
C)The Merton model
D)The Interbank Financial model

Question

Quizplus · Accepted Answer

The Miller-Orr model assumes that daily net cash flows are normally distributed and accounts for both cash inflows and outflows, making it suitable for determining target cash balances.

Which of the Following Approach for Determining the Target Cash