Cash Management Primarily Involves

question 45

Multiple Choice

Cash management primarily involves:

• A)optimizing a firm's collections and disbursements of cash.
• B)maximizing the income a firm earns on its cash reserves.
• C)reconciling a firm's book balance with its bank balance.
• D)determining the optimal level of liquidity a firm should maintain.
• E)determining the best method of raising capital.

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Definitions:

Par Value

The nominal value of a security stated by the issuer.

Effective Annual Yield

This refers to the real return on an investment, taking into account the effects of compounding interest over a year.

Yield To Maturity

The total return anticipated on a bond if the bond is held until its maturity date, including all payments of interest and principal.

Semi-annually

Semi-annually refers to an event or action occurring twice a year, or every six months.