Why would a company want to hold a lot of cash and marketable securities?

Q: what is meant by “The money market is necessary but not sufficient for the liquidity of securities…

A: Solution- The money market is an organized exchange market where participants can lend and borrow…

Q: Explain in detail the function played by the money market in the financial market.

A: Money market is a type of market which involves trading in short-term debt financial instruments.

Q: Do you agree that banks have high operating risks? Why?

A: The notion of operational risk in the banking system does not seem to be new. Nevertheless, it was…

Q: Could you explain the relationship between money, credit, and financial firms? Explain

A: A financial institution (FI) is a firm that deals with financial and monetary transactions such…

Q: Which of the following is NOT a purpose of valuing financial securities? a. Valuation is used to…

A: The term securities range from stocks and bonds to derivative contracts of various types such as…

Q: Which of the following is the risk due to a firm's industry?      Business risk     Financial…

A: In the ever-changing landscape of finance and investments, understanding different types of risks is…

Q: Which one of the following is NOT a 'Money Market Instrument'? Select one: a. Certificate of…

A: There are two types of markets are present: 1. Money market. 2. Capital market.

Q: Explain the statement “The money market is necessary but not sufficient for the liquidity of…

A: Money market instruments would be considered as investments under short term securities. These…

Q: What are the implications of the transformation function for the liquidity position of the bank?

A: Answer: Introduction: Liquidity is nothing but the ability of the bank to turn money into cash and…

Q: What is off-balance-sheet financing? Why might a companybe interested in using off-balance-sheet…

A:

Q: 1. Explain how capital reduces banking risks. Discuss the importance of cash flows and economic…

A: Capital reduces banking risks:  It reduces banking risk by protecting against insolvency. It is used…

Q: dows banking is a business industry?

A: Business is an activity to produce and sell and the products or rendering services above the actual…

Q: The business holds cash, treasury notes, and corporate bonds. It is exposing itself to interest rate…

A: Since business is exposing itself to interest rate risk, it is ready to bear or accept risk.

Q: creditors assess risk when lending funds

A: Assessment of risks when lending funds means evaluating the credit worthiness of the company in…

Q: Which of the following is a characteristic of a money market financial instrument?

A: Money market financial instruments are those instruments which have short maturity period of up to a…

Q: How relevant is capital to the operations of universal banks

A: Banks refer to the financial institution that is licensed to receive deposits and lend out loans.…

Q: Which of the following types of financial risk can be effectively managed by holding a lot of…

A: Step1 The chance of losing money on an investment or business transaction is referred to as…

Q: Liquidity risk is a. The risk of doing business in a particular industry or environment b. The…

A: When short term debt obligations of individual investor or business or financial institutions are…

Q: What part of a firm's balance sheet can be used as collateral?

A: The financial position of the company can be arrived from the income statement prepared by the…

Q: Which of the following is the risk due to a firm's debt usage?      Business risk     Financial…

A: The investments that we make in debt, equity and other financial securities are exposed to different…

Q: which m

A: Given: To explain the considerations of companies choosing a marketable security to investing in an…

Q: WHY IS MONEY MARKET IMPORTANT FOR BUSINESS?

A: The money market is a market of funds in which short-term funds are provided to the entities that…

Q: How do money markets and capital markets differ? Identify the types of securities traded in money…

A: Short-term debt is traded on the money market. Governments, businesses, banks, and other financial…

Q: What does the term "financial market" refer to exactly? Explanation of how it works

A: Introduction: Financial markets are very important to economic progress and national development.

Q: why is money market necessary but not sufficient for the liquidity of securities on the stock market

A: Money market (MM) is a place where short term (ST) securities are traded. Generally, governments or…

Q: Secondary markets are markets used by corporations to raise cash by issuing securities like bonds…

A: The stock market is a financial marketplace where individuals and institutions buy and sell…

Q: 1. Which of the following is a function of every financial market? A) It determines the level of…

A: “Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: Why are banks currently holding capital well above the minimum regulatory requirement?

A: Capital is the main and important ingredient of banks, without capital , we cannot run a bank,…

Q: How are financial reporting and capital markets related

A: Financial reporting and capital markets are concepts that need to be understood. Generally,…

Q: What would be a sign of a shortage in financial markets?

A: The financial market refers to the market in which people trade financial securities like bonds,…

Q: What is liquidity black holes?

A: Liquidity is when assets can be easily traded in the market with no compromise in the price of the…

Q: 1.What are the benefits and costs to an FI of holding large amounts of liquid assets? Why are…

A: As per our guidelines we are supposed to answer only one question (if there are multiple questions…