Discuss the reasons why corporations invest in securities. Discuss how the market would be affected if they stopped this practice?
Question;Discuss the reasons why corporations invest in securities. Discuss how the market would be affected if they stopped this practice?;Solution;There are many corporations that invest in the securities in order to earn returns and focus on their main business for the purpose of attaining profits. The reasons of a corporation to invest in the securities are as follows;Investment in the short term cash is done in the form of T- bills or commercial paper in order to invest their excess cash and earn returns on the short term basis. The corporation invests in the portfolio holding in order to generate the interest income. They try and buy the bonds from the client and customers and earn interest income. Strategic investments in the new business are done with the purpose of earning higher returns by investing in the startup business. These are the reasons for the corporation to invest in
Paper#20942 | Written in 18-Jul-2015Price : $27