What two definitions of cash are commonly encountered?
Differentiate between marketable securities held for operating
(transactions) purposes and securities held for other reasons.
How has the development of credit and debit cards affected firms’
currency holdings?
How would the use of credit cards affect a firm’s cash conversion
cycle, assuming it previously allowed customers 30 days to pay for
their purchases?
How does a firm’s ability to borrow affect its optimal holdings of
cash and securities?
Common stocks that are traded on the NYSE are liquid in the sense
that they can be sold and converted to cash on short notice. Are
stocks a good choice for a firm’s marketable securities portfolio?
Explain
