Investment

Question 1

3 segments of cash

Answer 1

1 - operating cash –> ST running business
2 - liquidity reserve –> Keep availible not needed immediately
3 - strategic balance –> no immediate use invest

Question 2

What to consider in your decision

Answer 2

HOw much cash availible? Where is it? Currency? How easy to bring together? How long availible for? Seasonality

Question 3

Investment policy

Answer 3

make policy and put against a benchmark

make returns but keep funds accessible

Question 4

3 Strategites

Answer 4

Passive - sweep accounts, automatic / match maturity and availibility
Active - more aggro / often buy long term or sell
Hybrid

Question 5

SLY FEATURES OF INSTRUMENTS

Answer 5

Security of principle
Liquidity
Yield

Make return while protecting principle - be easily accesible

Question 6

3 Risks in investing

Answer 6

Credit risk - value of asset falls due to credit rating fall
Interest rate risk - price v yields
Liquidity risk - Inactive market

Question 7

7 ST investment

Answer 7

Overnight investment funds
Bank depoistits
Certificates of deposit
Commercial paper
UK Tbills
Bills of exchange
Money market funds

Question 8

MMF

Answer 8

Pooled investment vehicle