Scribd
Upload
69 views3 pages

7.3 Marketable Securities Management Questions

The document consists of a series of questions related to cash management and investment strategies for corporate treasurers. It covers topics such as the primary concerns of a corporate treasurer, suitable marketable securities, and characteristics of U.S. Treasury bills. Additionally, it includes specific scenarios regarding the purchase of Treasury bills and the appropriate instruments for temporary cash investment.

Uploaded by

Unicorn Vn
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
69 views3 pages

7.3 Marketable Securities Management Questions

The document consists of a series of questions related to cash management and investment strategies for corporate treasurers. It covers topics such as the primary concerns of a corporate treasurer, suitable marketable securities, and characteristics of U.S. Treasury bills. Additionally, it includes specific scenarios regarding the purchase of Treasury bills and the appropriate instruments for temporary cash investment.

Uploaded by

Unicorn Vn
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 3

Question When managing cash and short-term investments, a corporate treasurer is primarily

1) concerned with

A. Maximizing rate of return.


B. Minimizing taxes.
C. Investing in Treasury bonds since they have no default risk.
D. Liquidity and safety.

Question
All of the following are alternative marketable securities suitable for investment except
2)

A. U.S. Treasury bills.


B. Eurodollars.
C. Commercial paper.
D. Convertible bonds.

Question
Which security is most often held as a substitute for cash?
3)

A. Treasury bills.
B. Common stock.
C. Gold.
D. Aaa corporate bonds.

Question In smaller businesses in which the management of cash is but one of numerous functions
4) performed by the treasurer, various cost incentives and diversification arguments suggest
that surplus cash should be invested in

A. Commercial paper.
B. Bankers’ acceptances.
C. Money market mutual funds.
D. Corporate bonds.
Question A firm is interested in purchasing a $100 U.S. Treasury bill and was presented with the
5) following options:

Annual Discount Rate

Due Date Yearly Rates

Option 1 180 days 6%

Option 2 360 days 3.5%

Option 3 120 days 8%

Option 4 240 days 4.5%


If the firm wishes to buy the Treasury bill at the lowest purchasing price, which option
should be chosen, assuming a 360-day year?

A. Option 1.
B. Option 2.
C. Option 3.
D. Option 4.

Question Assuming a 360-day year, the current price of a $100 U.S. Treasury bill due in 180 days
6) on a 6% discount basis is

A. $97.00
B. $94.00
C. $100.00
D. $93.00

Question Which one of the following instruments would be least appropriate for a corporate
7) treasurer to utilize for temporary investment of cash?

A. U.S. Treasury bills.


B. Money market mutual funds.
C. Commercial paper.
D. Municipal bonds.

Question
Which one of the following statements best characterizes U.S. Treasury bills?
8)

A. They have no coupon rate, no interest rate risk, and are issued at par.
B. They have an active secondary market, 1- to 24-month maturities, and monthly interest payments.
C. They have an active secondary market, the interest received is exempt from federal income tax, and there is no
interest rate risk.
D. They have no coupon rate, no default risk, and interest received is subject to federal income tax.

You might also like

pFad - Phonifier reborn

Pfad - The Proxy pFad of © 2024 Garber Painting. All rights reserved.

Note: This service is not intended for secure transactions such as banking, social media, email, or purchasing. Use at your own risk. We assume no liability whatsoever for broken pages.


Alternative Proxies:

Alternative Proxy

pFad Proxy

pFad v3 Proxy

pFad v4 Proxy