Short- Term Investments

One method healthcare companies use to finance future growth is to invest their excess cash in short-term investments. The four most common short-term investments are treasury bills, CDs, commercial paper, and money markets.

1. In your own words, explain how each of the four investments work and their relative risk level.
2. If your company had $100,000 to invest for around 1-year, which one of the 4 types of short-term investment would you suggest using and why?
3. Look at CD rates over different time periods. What are the current CD rates for 1-year? 5-years? 10-years? (You can find CD rates on many bank's websites.) Why do you think the rates are different?