Concerning the Baumol model, which of the following is not correct (all other things equal) ?
A) The optimum cash balance is higher the higher are interest rates.
B) The optimum cash balance is higher the higher are fixed order costs.
C) The optimum cash balance is higher the higher is the firm's total cash requirement.
D) The optimum cash balance is lower the higher are interest rates.
E) All of the above are correct.
Correct Answer:
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