A firm expects to have funds of $150,000 idle for 60 days. If the firm could purchase marketable securities yielding 2 percent annually and pay brokerage fees of $1,500, the firm A) should make the investment since interest earned exceeds brokerage fees B) should not make the investment because its return is less than its cost C) should leave the $150,000 in cash D) should invest the funds for more than 60 days due to the favorable rate
A firm expects to have funds of $150,000 idle for 60 days. If the firm could purchase marketable securities yielding 2 percent annually and pay brokerage fees of $1,500, the firm A) should make the investment since interest earned exceeds brokerage fees B) should not make the investment because its return is less than its cost C) should leave the $150,000 in cash D) should invest the funds for more than 60 days due to the favorable rate
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
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A firm expects to have funds of $150,000 idle for 60 days. If the firm could purchase marketable securities yielding 2 percent annually and pay brokerage fees of $1,500, the firm
A) should make the investment since interest earned exceeds brokerage fees
B) should not make the investment because its return is less than its cost
C) should leave the $150,000 in cash
D) should invest the funds for more than 60 days due to the favorable rate
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