1. Differentiate between marketable securities held for operating (transactions) purposes and securities held for other reasons.
2. How has the development of credit and debit cards affected firms currency holdings?
3. How would the use of credit cards affect a firms cash conversion cycle assuming it previously allowed customers 30 days to pay for their purchases?
4. How does a firms ability to borrow affect its optimal holdings of cash and securities?
5. Common stocks that are traded on the NYSE are liquid in the sense that they can be sold and converted to cash on short notice. Are stocks a good choice for a firms marketable securities portfolio? Explain