A companyrsquos cash position measured in millions of, Financial Management

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A companyrsquos cash position measured in millions of

A company’s cash position, measured in millions of dollars, follows a generalized Brownian motion with a drift rate a = 0.1 per month and a volatility rate b = 0.4 per month. The initial cash position is 2.0.

a) What are the probability distributions of the cash position after 1 month, 6 month and 1 year?

b) What are the probabilities of a negative cash position after 6 months and 1 year?

c) At what time in the future in the probability of a negative cash position greatest?

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Financial Management: A companyrsquos cash position measured in millions of

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Financial Management: A companyrsquos cash position measured in millions of

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