Question
You are a treasurer of a company and have excess funds of $10 million to invest. Your considerations are the following: (1) you need these
You are a treasurer of a company and have excess funds of $10 million to invest. Your considerations are the following: (1) you need these funds in 180 days; (2) you would like to maximize the return on your investment; (3) you are risk averse. Your investment advisor has provided you the following data for alternate investment opportunities: Security Maturity Price per $100 of face value T-Bill 90 days 98.5421 Commercial paper 30 days 99.5000 Corporate bonds (A rated), 8% coupon paid semi-annually 5 years 106.32 Comment on the suitability of each investment vehicle taking both risk and return into account. Show all your computations to justify your comments.
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