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Unformatted text preview: Financing Working Capital A. Seasonal and permanent increase in inventory requires financing. 1. Seasonal fluctuations a. Produce all at once b. Level production (include inventory) & a constant workforce III. Team Structure of Interest Rates A. Liquidity premium theory, long term securities are less liquid and more price sensitive B. Market segmentation a. Demand for securities varies b. Based on investor needs various financial instruments were created offering different rates & maturities. c. Expectation theory, long term rates reflect the average of expected short term rates over the time period of the security outstanding....
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This note was uploaded on 04/29/2008 for the course FINA 10100 taught by Professor Markert during the Spring '08 term at Ithaca College.
- Spring '08