FIN 610Lisa IodiceHomework 8 - minimal acceptable security...

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FIN 610 Lisa Iodice Homework 8-4 What is an investment policy? What are the key inputs that a company might use in developing the policy? A company’s investment policy defines the company’s behavior towards risk and reward and contains the specifics as to how the policy should be implemented. Some of the things that are common in many companies’ investment policies are yield, safety and liquidity. The risks generally take precedence over return and preservation of principal is key. As listed in our text, when a company develops an investment policy they should be addressing the following potential investment eligibility standards:
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Unformatted text preview: minimal acceptable security rating proportional limits (not having your eggs all in one basket (one security) if a “buy and hold” strategy is appropriate portfolio return targets, whether relative or absolute maturity limits the intermediary for making the investments, such as brokers, dealers or bank traders procedures and controls how the performance of the portfolio will be evaluated and monitored Zietlow, J., Hill, M., & Maness, T. (2014). Short-term investing. In Short-term financial management (4th ed., pp. 369-420). Cognella Academic Publishing....
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