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In Contrast to the Baumol Model, the Miller-Orr Model

Question 5

Multiple Choice

In contrast to the Baumol model, the Miller-Orr model:


A) includes both cash inflows and outflows.
B) assumes that the distribution of daily cash flows is normally distributed.
C) allows the cash inflows and outflows to fluctuate randomly from day to day.
D) on each day the net cash flow could be the expected value or some higher or lower value.
E) All of the above.

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