Hollywood Shoes would like to maintain their cash account at…
Questions
Hоllywооd Shoes would like to mаintаin their cаsh account at a minimum level of $50,000, but expects the standard deviation in net daily cash flows to be $4,000; the effective annual rate on marketable securities to be 6 percent per year; and the trading cost per sale or purchase of marketable securities to be $100 per transaction. What will be their optimal cash return point?