Management of Marketable Securities Essay

Cash and merchantable securities are normally treated as unity item in any(prenominal) analysis of current assets and holding gold in excess of immediate requirement means that the firm is wanting out an opportunity income. Excess cash thus is normally invested in merchantable securities, which serves two purposes namely providing liquidity and also earning a return. invest surplus cash in marketable securities is normally a adjourn of overall cash management. The task of financial managers, who become involved with marketable securities either full time or part time consists of leash issues. Initially the managers must understand the detailed characteristics of different short margin investment opportunities. Secondly, managers must understand the markets in which those investment opportunities are taught and sold. in the long run managers must develop a strategy for deciding when to buy and fail marketable securities, which securities to hold, and how much to buy or sel l in from each one transaction.Need for investment in securitiesMarketable securities result from investment decisions that unfeignedly are not the main part of the firms job however, marketable securities tar bum aroundnot be ignored, as they constitute a part of the respect of the firm that is entrusted to management. However, they cannot use the short term surplus cash flows for any long term purposes. Surplus cash is thus invested in marketable securities primarily to earn an income, which new(prenominal)wise remains idle within the firm. Companies which were blushful with money at one point of time and investing hard in marketable securities, may issue short term securities to other and borrow money at another point of time. Another orotund reason for holding marketable securities is on account of mismatch amid the borrowing and investment programs. Types of marketable securitiesMarketable securities available for investments can be grouped under several(prenominal) w ays and they can be sort under three broad heads namely debt securities, equity securities and contingent take securities which in turn can be grouped under several heads. Debt securities There are different kinds of debt securities namely money market instruments and seat of government market debt instruments.Money market instruments can be distinguished as call money, certificates of deposit, commercial paper, banker acceptances, government securities or securities guaranteed by the government. Capital market debt instruments can be further subdivided into treasury notes and treasury bonds, Public sector childbed 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 physique of hours for home preparation and in case of need they can get home tuition and by clicking the educational websites, they can also date the topics by help available thro ugh finance homework.Referencehttp//classof1.com/homework-help/finance-homework-help