Discussion Questions

"Money Market Risk" Please respond to the following:

From the e-Activity, assess how changes in the regulatory environment related to money market funds would cause companies to reconsider their holdings in a money market fund giving consideration to the impact of investor risk. Provide support for your answer. 

Money market investments have little, if any, risk. Agree or disagree with the statement, providing support for your argument. 

"Bond Risk Management" Please respond to the following:

Given the Federal Reserve Board’s current and forward-looking position on interest rates, predict the level of risk associated with investing in bonds and recommend a portfolio percentage for investment in bonds for a financial institution. Provide support for your recommendation. 

Assess how an increase in the interest rate would change your recommendation provided above. Indicate the basis for your rationale.