Q In the Metropolis forecast example, we are using cash as a plug number. To keep the examis
simple, we assume that the cash is not sitting in an interest-bearing bank account. Imagine the
cash were in an interest-bearing account, meaning the company would earn interest revenue
based on the cash balance. How would this affect your forecast and forecasting process?

Explanation:

The interest earned would be calculated at the end of every day on the cash balance that the company holds in the interest-bearing bank account.

The cash balance would be adjusted to reflect realistic assumptions were made because unrealistic assumptions makes the forecasting unreasonable and meaningless. The first step is to take the previous month end average cash balance and add in it the current month average balance. This will give us the current month cash balance that will be based on realistic assumptions. Use the excel sheets to take affects of estimated cash and other factors that will change due to the change in the cash balances. Excel will take account of all the factors adjusted in the forecasting sheet and adjust these factor's effects within seconds.

answer; a set of mutual funds with similar risk characteristics to your mutual fund;