Which of the Following Is True in the BAT Model

Multiple Choice

Which of the following is true in the BAT model?

A) As the initial cash balance rises, opportunity costs fall.
B) For a given initial cash balance, the total cost of holding cash will rise with decreases in opportunity costs.
C) As average cash balances fall, opportunity costs rise.
D) For a given initial cash balance, the total cost of holding cash will rise with decreases in the fixed cost of making a securities trade.
E) A drawback to the BAT model is that it assumes steady, certain cash outflows.