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Genentech Corporation, by analyzing its weekly balances in its checking account
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1.Genentech Corporation, by analyzing its weekly balances in its checking account, has determined that the variance of cash flows is \$3,000,000. Further, the cost of transferring money from the checking account to a money market account is \$65 per transfer. The interest on the checking account is 1%, while that on the market account is 6%. Genentech wants to keep \$5,000 as a minimum balance in the checking account. Find the annual cost of interest forgone.

2.Miller-Orr, Excel: New Jersey Company has recorded the following balances in its checking account for 15 consecutive Wednesdays:

Week no. Balance Week no. Balance Week no. Balance
1 \$11,347 6 \$23,343 11 \$13,907
2 \$12,525 7 \$17,673 12 \$13,623
3 \$16,003 8 \$15,985 13 \$15,249
4 \$17,056 9 \$12,078 14 \$18,466
5 \$21,732 10 \$10,049 15 \$19,567

What is σ, the standard deviation of the net cash flows?

3.Treasury Securities: Nevada Company has bought T-bills with face amount \$5.45 million, with a discount of 4.73%, and time to maturity 73 days. Find its bond equivalent yield, and its yield as a zero coupon bond.
4.84%, 4.94% ♥

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Genentech Corporation, by analyzing its weekly balances in its checking account
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• Submitted On 25 Dec, 2014 10:12:57
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1.Genentech Corporation, by analyzing its weekly balances in its checking account, has determined that the variance of cash flows is \$3,000,000. Further, the cost of transferring money from the checking account to a money market account is \$65 per transfer. The in...
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