Miller Orr model

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June 1, 2021 at 10:51 pm #622707
kmiguel
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Good day sir, why do we need to use the interest rate per day instead of p.a. to calculate the spread?
June 2, 2021 at 8:19 am #622731
John Moffat
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It is because the cash balance will keep changing and we assume that interest is charged or earned on a daily basis (as is the case in real life).
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