Management of Marketable Securities Essay

Cash and merchantable securities are normally interact as one item in any analysis of current assets and holding specie in excess of immediate requirement means that the firm is missing out an opportunity income. Excess cash thus is normally invested in marketable securities, which serves two purposes namely providing liquidity and also earning a return. spend surplus cash in marketable securities is normally a give way of overall cash management. The business of financial managers, who become involved with marketable securities either full epoch or part time consists of three issues. Initially the managers essential understand the detailed characteristics of various short term investment opportunities. Secondly, managers must understand the markets in which those investment opportunities are taught and sold. Finally managers must develop a strategy for decision making when to buy and sell marketable securities, which securities to hold, and how much to buy or sell in each transaction. pauperism for investment in securitiesMarketable securities result from investment decisions that really are not the main part of the firms business however, marketable securities cannot be ignored, as they constitute a part of the grade of the firm that is entrusted to management. However, they cannot use the short term surplus cash flows for any long term purposes. dissipation cash is thus invested in marketable securities primarily to earn an income, which otherwise remains idle at heart the firm. Companies which were flushed with money at one usher of time and investing heavily in marketable securities, may issue short term securities to other and borrow money at another point of time. Another prominent reason for holding marketable securities is on account of mismatch between the conduct and investment programs. Types of marketable securitiesMarketable securities available for investments can be grouped under several slipway and they can be classified under three broad heads namely debt securities, equity securities and contingent advance securities which in turn can be grouped under several heads. Debt securities There are different kinds of debt securities namely money market instruments and capital market debt instruments.Money market instruments can be called as call money, certificates of deposit, commercial paper, banker acceptances, government securities or securities guaranteed by the government. Capital market debt instruments can be shape up subdivided into treasury notes and treasury bonds, Public sector undertaking bonds, corporate bonds etc.Students in order to get good grades in their examinations have to listen the lectures delivered by the teachers and professors keenly they should allot certain number of hours for root preparation and in case of need they can get home tuition and by clicking the educational websites, they can also learn the topics by help available through finance homework.Referencehttp//classof1.co m/homework-help/finance-homework-help