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Which marketable security would you choose for a short term investment?
Wiki User
∙ 11y ago
Which security would you choose for a short-term investment
Wiki User
∙ 11y ago
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What is marketable securities on a balance information sheet?
marketable securities are short term investment by the company to be liquidated when required and until that time earn interest revenue instead of keeping liquid cash in bank.
Why does the purchase of an item classified as a cash equivalent not appear on the statement of cash flows as an investing activity?
A cash equivalent is a short-term investment in marketable securities that can be sold very quickly (three days or less in an active exchange); its purpose is to provide some level of return on excess cash that would otherwise be sitting in a bank account. To that extent that the cash equivalent can be thought of as operating cash on hand, and not as an investment. If, on the other hand, a company bought marketable securities to hold for investment purposes over the long-term that would be investing. Given that the purchase of cash equivalents is related to operating activities it is accounted for in cash flows from operating activities. The investment in marketable securities "held for investment" would be treated as an investing activity.
What is the safest and most marketable instrument for short-term investment?
t-bills-you do not earn much but you do not lose principal. Many would choose other vehicles but it depends on your risk threshold-great place to park money Ask yourself, how much am I willing to loose...give t-bills a try, it cannot hurt you and then try something else if you are not satisfied
Wher is the best place to stash $50000 as a Long Term Investment ?
I would recommend a 401k or a short term investment fund. This is a great investment that is short term and you can gain double on your investment.
In the management of cash and marketable securities why should the primary concern be for safety AND liquidity rather than profit maximization?
the firm may hold excess funds in anticipation of cash outlay.when funds are being held for other than immediate transaction purposes, they should be converted from cash into interest-earning marketable securities which should be of highest investment grade usually consist of treasury bills, commercial paper, certification of time deposits from commercial banks realistically, management of cash and marketable securities cannot be separated. management of one implies management of other reasons for holding marketable securities there are several reasons for holding marketable securities such as 1. they serve as a substitute for cash balances many firms prefer to hold marketable securities as a substitute for transaction balances, precautionary balances, for speculative balances of for all three. in most cases the securities are held primarily for precautionary purposes or as a guard against a possible shortage of bank credit. 2. they held as a temporary investment where a return is earned while funds are temporarily idle. 3. they are built up to meet known financial requirements such as tax payments, maturing bond issue and so on. factors influencing the choice of marketable securities among the factors that will influence the choice of marketable securities 1. risk such as a. default risk. the risk that the issuer of the security can not pay the principal or interest at due dates. b. interest rate risk. the risk of declines in market values of the security due to rising interest rate c. inflation rate. the risk that inflation will reduce the real value of the investment. in periods of rising prices, inflation risk is lower on investments whose returns tend to rise with inflation than on investment whose return are fixed. 2. maturity MARKETABLE SECURITIES held should mature or can be sold at the same time cost is required. 3. yield or returns on securities. generally, the higher a security's risk the higher its required return. corporate investors, like other investors must make a trade-off between risk and return when choosing marketable securities. because these securities are generally held either for specific known need or for use in emergencies, the portfolio should consist of highly liquid short-term securities issued by the government or very strong corporations. treasurers should not sacrifice safety for higher rates of return. 4. Marketability (liquidity) risk this refers to the risk that securities cannot be sold at close to the quoted market price and is closely associated with liquidity risk.
Where can one go to learn about short term investment options?
One of the best places to go to learn about your short term investment options would be your local bank. They would have the information needed to provide you to provide safe short term investment options.
Is short term investment a working capital?
yes
What is meant by the term portfolio investment?
Portfolio investment refers to investments in foreign countries that are withdrawable at short notice, such as investment in foreign stocks and bonds.
What time frame is considered a short term investment?
A short-term investment typically refers to an investment that is held for a period of one year or less. It can involve buying and selling stocks, bonds, or other financial instruments within a relatively short period of time in order to take advantage of short-term price fluctuations or market opportunities.
What is the advantage of a short term investment?
The advantage of short term investment is to get a maximum return in the shortest time possible. This is typically done by seasoned investors who are confident of a sure hit.
What are the characteristics of a capital investment decision?
The characteristic of a capital investment decision is an investment of long-term choices about which projects receive investment, whether to finance that investment with equity or debt, and when or whether to pay dividends to shareholders.On the other hand, a short-term decision deal with the short-term balance of current assets and current liabilities; the focus here is on managing cash, inventories, and short-termborrowing and lending (such as the terms on credit extended to customers)
Can a security short a person?
No. But a person can "short" a security, that is, he can "sell short" by agreeing to sell a stock that he does not yet own, hoping that he can buy it for less than he is selling it for.
