Q. You are the CEO of a Fortune 500 company. You have two objectives:
1. Invest $5 million cash on hand short term (overnight to one month); and
2. Borrow $100 million for your firm's working capital needs.
How would you achieve both objectives using the money markets? Describe your alternatives in terms of the characteristics of money markets instruments. Which of the money market instruments would you choose in each case? Why?
Assuming no other changes, if balances in money market deposit accounts increase by $50 billion and small-denominated time deposits decrease by $50 billion.