46. The two main objectives for a monthly cash forecast are ______________ and _______________.

inexpensiveness, simplicity computerization, accuracy quickness, simplicity usefulness, accuracy

Question 47.47. ______________ companies and/ or those with _____________ cash flow patterns are logically not as willing to spend very much time or money in developing cash forecasts.

Large, stable Large, variable Small, stable Small, variable

Question 48.48. As sales grow, some of the added current asset requirement is provided by growth in current assets. This often results in what kind of source of funds?

spontaneous source spontaneous source plowback funding arranged financing

Question 49.49. The basic driving variable for a company's short-term financial planning model would be:

Gross profit margin sales desired ending inventory debt maturity structure

Question 50.50. An investor trying to gain an understanding of what determines commercial paper rates should focus on:

the commercial paper market the T-bill market the CD rates all of the above b and c

Question 51.51. Relative to treasury securities, agency securities have __________ liquidity and ___________ default risk.

less, less less, more more, more more, less

Question 52.52. Which of the following is not one of the advantages of money market mutual funds?

enhanced liquidity greater flexibility higher yields exemption from state and local income taxes

Question 53.53. Mortgage backed government agency securities are NOT suited to the short-term investor because they

have high interest rate risk have uneven cash flows do not permit prepayment of the mortgages backing them all the above are correct a and b

Question 54.54. Money market securities are issued in:

The primary market The secondary market The private placement market all of the above a and c

Question 55.55. The _______ is the rate charged depository institutions when they borrow reserves from the Fed; the _______ is the rate charged on reserve borrowings transacted between banks.

Discount rate, Fed funds rate Fed funds rate, Discount rate LIBOR, Fed funds rate Fed funds rate, LIBOR

Question 56.56. Why is an analysis of the pattern and variability of the investing company's cash flows so important as part of the short-term investment process?

it guides dollar amounts and maturities of investments it insures that state and federal regulations are met it protects the investment manager against shareholder lawsuits it ensures that the company's brokers and banks do not trick the company into making overly risky investments

Question 57.57. Why should the investment officer be concerned about the loan covenants on the company's loans?

they may force the company to invest in high-risk, high-return securities in order to have enough interest revenue to pay the loan's interest expense they may include fine print forcing the company to engage in illegal activities they may prohibit certain types and/or amounts of investments all of the above

Question 58.58. When determining how much of the firm's total assets to invest in cash and securities, a low-liquidity strategy entails investing ___________ of the assets in cash and securities, earning ____________ expected profits in total.

relatively less, relatively more relatively more, relatively more relatively less, relatively less relatively more, relatively less

Question 59.59. A "clean up" is:

a periodic payment of all interest a borrower owes to date on a line of credit a period of time over which the lender defers interest to a later date on a borrower's line of credit a period of time over which a company reduces its outstanding balances to zero on order to demonstrate has not become permanent capital the removal of the compensating balance requirement on a line of credit

Question 60.60. The minimum level of ongoing inventory and receivables is what is referred to as ______________ current assets.

transitory modifiable discretionary permanent