PRIN.OF CORPORATE FINANCE
PRIN.OF CORPORATE FINANCE
13th Edition
ISBN: 9781260013900
Author: BREALEY
Publisher: RENT MCG
Question
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Chapter 30, Problem 22PS

a)

Summary Introduction

To discuss: Whether money market is the system of electronic cash transfers between the companies within banking industry.

b)

Summary Introduction

To discuss: Whether Euro dollar market is exchanging dollars for euros or vice versa.

c)

Summary Introduction

To discuss: Whether most of the large corporations are maintaining several bank accounts.

d)

Summary Introduction

To discuss: Whether yields quoted on basis of discount are always lesser than true interest rates.

e)

Summary Introduction

To discuss: Whether cost of excess amount of cash is lower, if interest rates are lower.

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Which of the following is NOT an advantage of depositing funds into a bank account (compared to directly purchasing corporate bonds and shares): Options    1. Higher transactions costs   2. Monitoring performed by the bank on behalf of the depositor   3. Better liquidity if funds are needed quickly   4. Efficient payment services   5.Reduced price risk if funds are needed immediately
This refers to a bank that has agreement with the clearinghouse to exchange checks.        A. Commercial Bank       B. Correspondent Bank       C. Universal Bank       D. Concentration Banking   2. Firms hold cash for the purpose of taking advantage of investment opportunities.        A. Precautionary Motive       B. Transaction Balance       C. Compensating Balance       D. Speculative Motive   3.  This refers to the process of monitoring and analyzing the amount of cash needed and how it can be generated.        A. Cash Monitoring       B. Cash Balances       C. Cash Management       D. Cash Forecasting
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