a) The Tommy Byrne Company is currently holding $700,000 in cash. It projects that over the next year its cash outflows will exceed cash Inflows by $360,000 per month. i. How much of the current cash holding should be retained, and how much should be used to increase the company's holdings of marketable securities? (2 Marks) ii. Each time these securities are bought or sold through a broker, the company pays a fee of $500. The annual interest rate on money market securities is 6.5 per cent. (2 Marks) iii. After the initial investment of excess cash, how many times during the next 12 months will securities be sold? (1 Marks) b) No More Pencils plc disburses cheques every two weeks that average 70,000 and take seven days to clear. How much interest can the company earn annually if it delays transfer of funds from an interest-bearing account that pays 0.02 per cent per day for these seven days? Ignore the effects of compounding interest. (5 marks) c) Discuss the major activities of a typical dealing room in a treasury department. (5 marks) d) What factors do you think are likely to the risk tolerance of such a fund? ( 5 marks) e) What is the use of the securities portfolio in a bank? (5 marks) [Total Marks = 25] a) The Tommy Byrne Company is currently holding $700,000 in cash. It projects that over the next year its cash outflows will exceed cash Inflows by $360,000 per month. i. How much of the current cash holding should be retained, and how much should be used to increase the company's holdings of marketable securities? (2 Marks) ii. Each time these securities are bought or sold through a broker, the company pays a fee of $500. The annual interest rate on money market securities is 6.5 per cent. (2 Marks) iii. After the initial investment of excess cash, how many times during the next 12 months will securities be sold? (1 Marks) b) No More Pencils plc disburses cheques every two weeks that average 70,000 and take seven days to clear. How much interest can the company earn annually if it delays transfer of funds from an interest-bearing account that pays 0.02 per cent per day for these seven days? Ignore the effects of compounding interest. (5 marks) c) Discuss the major activities of a typical dealing room in a treasury department. (5 marks) d) What factors do you think are likely to the risk tolerance of such a fund? ( 5 marks) e) What is the use of the securities portfolio in a bank? (5 marks) [Total Marks = 25]