The cost of going to an ATM is $1 in an economy. If the nominal interest rate in the economy is 5 percent, what is the total cost associated with holding cash for an individual who spends $10 daily and has a 15 percent probability of having his cash lost or stolen? Assume that he visits the ATM once in every T days.
A. (182.5/T) + (0.2 ×T)
B. (182.5/T) + (0.2 ×T)
C. (365/T) + (0.5 ×T)
D. (365/T) + T
Answer: D
You might also like to view...
The following contribute to information overload:
a. e-mail forwards. b. spam. c. phishing. d. all of the above
Which of the following occurs when one person seeks to outdo or outshine another person?
A. differences over facts B. differences over goals and priorities C. competition for scarce resources D. competition for supremacy
For many people, the essence of the value of integrating marketing with public relations is in product publicity
Indicate whether the statement is true or false
Free cash flow is cash from operations, less cash for
A) dividends and cash for fixed assets needed to maintain productivity B) dividends and cash to redeem bonds payable C) fixed assets needed to maintain productivity D) dividends, cash for fixed assets needed to maintain productivity, and cash to redeem bonds payable