8) MANAGING YOUR MONEY. You have excess cash. You anticipate that you will need to have 1 year (12 months) worth of expenses covered. You want to make sure that you can have access to your cash, but also gain interest as well, throughout the 12 months. Your expenses are $3000 per month. You have $36,000 in cash. You want to put it in various accounts or funds for: 1 month, 3 months, 6 months, and 12 month. The remaining amounts you want going to something that will earn you the highest interest. How would you allocate them in various accounts (checking, NOW, savings, MMDA, CDs, T-Bills, Mutual funds, brokerage accounts, asset management accounts), in order to manage your liquidity (have access to your money and still gain interest)?
8) MANAGING YOUR MONEY. You have excess cash. You anticipate that you will need to have 1 year (12 months) worth of expenses covered. You want to make sure that you can have access to your cash, but also gain interest as well, throughout the 12 months. Your expenses are $3000 per month. You have $36,000 in cash. You want to put it in various accounts or funds for: 1 month, 3 months, 6 months, and 12 month. The remaining amounts you want going to something that will earn you the highest interest. How would you allocate them in various accounts (checking, NOW, savings, MMDA, CDs, T-Bills, Mutual funds, brokerage accounts, asset management accounts), in order to manage your liquidity (have access to your money and still gain interest)?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Related questions
Question
1
Transcribed Image Text:8) MANAGING YOUR MONEY. You have excess cash. You anticipate that you
will need to have 1 year (12 months) worth of expenses covered. You want to
make sure that you can have access to your cash, but also gain interest as well,
throughout the 12 months. Your expenses are $3000 per month. You have
$36,000 in cash. You want to put it in various accounts or funds for: 1 month, 3
months, 6 months, and 12 month. The remaining amounts you want going to
something that will earn you the highest interest. How would you allocate them
in various accounts (checking, NOW, savings, MMDA, CDs, T-Bills, Mutual
funds, brokerage accounts, asset management accounts), in order to manage
your liquidity (have access to your money and still gain interest)?
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps with 2 images
Recommended textbooks for you
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781337395250
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Finance
ISBN:
9780077861759
Author:
Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:
McGraw-Hill Education