All money market instruments are short term debt

Case Study, excess cash and short term investments. 2 files
Subject
Economics

Course
Economic Financial Environment of Business

School
Wilmington University

Question Description
Use attahed Template.
Data Source: https://www.treasurydirect.gov/instit/instit.htm

This data source will cover all but CDs

Business-professional quality is expected. Prepare your report as if you are submitting to an upper-level business director/executive.
Case will require a qualitative analysis supported by quantitative data.

Prepare each case using Word, and embed your spreadsheet analysis into your case report.

You will submit two files for each case assignment:

One Word file
One Excel file (template attached)

Short-term investment returns: money market instruments Part of your responsibilities as a junior financial analyst is researching and identifying potential short-term liquid investment options for your firm. These investment vehicles are at times used by the firm during periods when their cash inflows exceed projections. The firm, at times, uses excess cash to purchase short-term debt instruments providing a low, but safe marginal return on invested capital. Your Director, who reports to the firm’s Chief Financial Officer (CFO) has come to you seeking your recommendation on short-term investment options for the upcoming year. The Director has asked for recommendations and a report illustrating your optimal analysis for investing $2.5m of excess cash. Current background info: We have a potential impending compound money market problem: The U.S. is issuing more debt, in part due to the recent tax cuts. Simultaneously, the Fed, China, Japan and to a lesser degree Russia have been reducing their holdings of U.S. Debt. Therefore, if the U.S. Treasury Department can’t get entities to their positions holding U.S. debt, then the pressure to increase interest rates to make newly issued securities attractive increases. Increased interest rates at the Treasury means securities prices fall with cascading impacts. Therefore, the current interest rate environment is one where rates are expected to increase. Parameters for the research and analysis report are as follows: