MANAGEMENT OF WORKING CAPITAL: AN INTERNATIONAL PERSPECTIVE 391
be invested in marketable securities. This is a major problem for international cash manage-
ment, as many currencies and many affiliates are involved. The MNC has to maintain cash
balances in different currencies simultaneously to satisfy the needs of subsidiaries located
in different countries. There are also several rewarding opportunities (marketable securities
denominated in different currencies) available worldwide.
There are some cash management models (e.g. the Baumol model and the Miller–Orr
model) that determine the optimal level of investment in marketable securities. Some of
these models are deterministic, and others are stochastic. These models give useful insights ...