a) What are two definitions of cash, and why do corporate treasurers often use the second

definition?

b) What is a cash budget, and how can this statement be used to help reduce the amount of cash that a firm needs to carry? What are the advantages and disadvantages of daily over monthly cash budgets, and how might a cash budget be used when a firm is negotiating a loan from its bank?

c) What are the key factors on which external financing depends, as indicated in the AFN equation?

d) Would you agree that computerized corporate planning models were a fad during the 1990s but that because of a need for flexibility in corporate planning, they are no longer used by most firms? Explain.

e) List seven reasons risk management might increase the value of a firm.

f) Why do options typically sell at prices higher than their exercise values?

g) Discuss some of the techniques available to reduce risk exposure.

h) Give two reasons stockholders might be indifferent between owning the stock of a firm with volatile cash flows and the stock of a firm with stable cash flows.