GFOA Exam CPFO Topic 1 Question 76 Discussion

Actual exam question for GFOA's CPFO exam

Question #: 76
Topic #: 1

[All CPFO Questions]

The Unites Way receives $1,500,000 in funds in a lump sum at the beginning of the year and has constant cost and predictable annual cash outlays. Eight percent is estimated to be earned at securities with each security transaction costing $40 plus 0.5 percent of the dollar amount received. What will be the optimum security scale using Baumol Model?

A$38700

B$38730

C$38830

DNone of these

Show Suggested Answer

Suggested Answer: A

by Valentin at Oct 18, 2023, 04:38 AM

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Judy

5 days ago

This question is all about finding the optimal security scale using the Baumol Model. I think the answer is C) $38,830, but I'm not 100% sure.

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Hubert

11 days ago

Hmm, that makes sense. I see your point.

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Ira

15 days ago

I disagree, I believe the answer is B) $38730 because it takes into account the transaction costs.

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Hubert

16 days ago

I think the answer is A) $38700.

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