Question: Determine which instrument from the list below would be the most appropriate for the described situations (Note: more than one may be suitable): Repurchase Agreements
Determine which instrument from the list below would be the most appropriate for the described situations (Note: more than one may be suitable):
Repurchase Agreements
Commercial Paper
Negotiable Certificates of Deposit
Federal Funds
Common Stock
Long-term corporate bonds
Bank loans
Mortgage-backed securities
U.S. Government agency securities
- A large company wishes to obtain financing for inventory that it expects to sell in a month.
- A large corporation wishes to earn interest on its excess cash balances for a three-day period.
- A hedge fund wishes to obtain funds to purchase a publicly held corporation and take it private.
- A large bank wishes to replenish its reserves as soon as possible.
- A small company requires financing to open a second restaurant in a neighboring town.
- A large bank needs additional funds since the demand for its loans exceeds the amount it attracts in deposits used to fund them.
- An entrepreneur needs funding to make her idea commercially viable.
- Fannie Mae raises funds to purchase mortgages originated by banks.
- Ginnie Mae raises funds to purchase mortgages originated by banks.
- A large company decides to raise money to build a new facility overseas.
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