LO3. The management of marketable securities involves selecting between various short-term investments.

Part A: Use the Wall Street Journal, or any financial website, to find the going interest rates for the list of marketable securities found in Table 7-1 on page 202. Which security would you choose for a short-term investment? Why? (LO7-3)

Part B: Explain how you would use this information as the VP of Finance.

	Maturity	Minimum Amount	Safety	Marketability	Yield March 22, 1980	Yield July 14, 2000	Yield January 9, 2003	Yield May 14, 2010	Yield January 12, 2018	Yield January 9, 2015
Federal government securities:
Treasury bills	3 months	$ 100	Excellent	Excellent	14.76%	6.06%	1.18%	0.16%	1.43%	0.03%
Treasury bills	6 months	$ 100	Excellent	Excellent	13.85	6.34	1.24	0.23	1.57	0.09
Federal agency securities:
Federal Home Loan Bank	1 year	5,000	Excellent	Excellent	14.40	6.78	1.40	0.25	1.52	0.43
Nongovernment securities:
Certificates of deposit (large)	3 months	100,000	Good	Good	16.97	6.65	1.29	0.38	1.31	0.27
Certificates of deposit (small)	3 months	500	Good	Poor	15.90	6.00	1.31	0.35	1.11	0.21
Commercial paper	3 months	25,000	Good	Fair	17.40	6.50	1.28	0.21	1.61	0.17
Bankers acceptances	3 months	None	Good	Good	17.22	6.51	1.31	0.35	1.62	0.23
Savings accounts	Open	None	Excellent	None	5.25	3.00	1.25	0.40	1.35	0.06
Money market funds	Open	500	Good	None	14.50	6.00	0.96	0.72	1.40	0.40
Money market deposit accounts (financial institutions)	Open	1,000	Excellent	None		5.50	1.20	0.57	1.35	0.08