explain

3. Explain the impact of the events in the graph on the cash index.[10 pts] II. Cash index rose significantly on fortified liquidity buffers 110 US Fed starts raising interest 105.1 105.0 105 101.8 2010 1000 c 99.9 100 98.8 U.S. tax reforms 98.1 98.2 Brexit Referendum 95 Eurozone Crisis 935 Fears of a hard landing in China 90 916 COVID-10 pandemic 85 2011 2012 2013 2014 2015 2016 2017 2018 12019 2019 1 H2020 2020 The Cash Index also rose in 2020 to levels not seen in seven years as corporates turned to fund- raising initiatives and cash preservation measures to shore up their liquidity buffers amid the pandemic. Cash preservation initiatives employed included putting a pause on share repurchases, cutting back capital expenditure and reducing external spending. The record low interest rate environment coupled with the massive stimulus from the U.S. government further made it easier for companies to boost their cash holdings, With a recovery taking shape in 2021, we expect corporates to start deploying the excess cash through capital investments, share buybacks, dividends payout, debt repayments or M&As, reducing their cash holdings. Takeaway: As corporates prepare for a recovery in their businesses, treasurers should revisit their cash management strategies and shift focus from cash preservation to cash deployment to support the business growth. 3. Explain the impact of the events in the graph on the cash index.[10 pts] II. Cash index rose significantly on fortified liquidity buffers 110 US Fed starts raising interest 105.1 105.0 105 101.8 2010 1000 c 99.9 100 98.8 U.S. tax reforms 98.1 98.2 Brexit Referendum 95 Eurozone Crisis 935 Fears of a hard landing in China 90 916 COVID-10 pandemic 85 2011 2012 2013 2014 2015 2016 2017 2018 12019 2019 1 H2020 2020 The Cash Index also rose in 2020 to levels not seen in seven years as corporates turned to fund- raising initiatives and cash preservation measures to shore up their liquidity buffers amid the pandemic. Cash preservation initiatives employed included putting a pause on share repurchases, cutting back capital expenditure and reducing external spending. The record low interest rate environment coupled with the massive stimulus from the U.S. government further made it easier for companies to boost their cash holdings, With a recovery taking shape in 2021, we expect corporates to start deploying the excess cash through capital investments, share buybacks, dividends payout, debt repayments or M&As, reducing their cash holdings. Takeaway: As corporates prepare for a recovery in their businesses, treasurers should revisit their cash management strategies and shift focus from cash preservation to cash deployment to support the business growth