Exercise 1 Examples of sources and uses of funds for commercial banks: Liabilities, mortgage loans, auto loans and deposits Exercise 2 You are the treasurer of a mid-size industrial manufacturer, your firm’s cash balances vary between $300,000 and $1,000,000. During the last three board meetings a board member has asked how you protect this cash while it is being lodged in banks or other temporary facilities. Your problem is to satisfy the board member, obtain some income from the cash or cash equivalent balances, and has funds available for immediate payout if required. What course of action do you follow? Determine and put in place a financial strategy and policy, research and advise what business to invest in, get in place appropriate funding and manage financial risks. Problem 1 A Loan A interest = 120,000 x 7% = 8,400
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- Spring '14