What are the two principal reasons for holding cash

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Reference no: EM13927651

1) What are the two principal reasons for holding cash? Can a firm estimate its target cash balance by summing the cash held to satisfy each of the two reasons?

2) What are the four elements of a firm's credit policy? To what extent can firms set their own credit policies as opposed to accepting policies that are dictated by their competitors?

3) What are the advantages of matching the maturities of assets and liabilities? What are the disadvantages?

4) From the standpoint of the borrower, is long-term or short term credit riskier? Explain , Would it ever make sense to borrow on a short-term basis if short-term basis rates were above long-term rates?

Reference no: EM13927651

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