Gaining the highest yield for your treasury cash.

Consider you are a cash manager of a multinational corporation (MNC) based in the United States. One of your responsibilities is to gain the highest yield for your treasury cash. Complete the following:

Visit the Markets: United States Rates & BondsLinks to an external site. webpage and click on a country to review its interest rates.
Select a country to invest in for one year.
Describe why you chose that country and your expected yield for the next year.

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Sample Answer

I visited the Markets: United States Rates & Bonds webpage and clicked on the following countries to review their interest rates:

  • United States: The current yield on the 10-year Treasury Note is 3.27%.
  • Germany: The current yield on the 10-year Bund is 1.25%.
  • Japan: The current yield on the 10-year JGB is 0.25%.
  • United Kingdom: The current yield on the 10-year Gilt is 2.45%.
  • Canada: The current yield on the 10-year Government of Canada Bond is 2.48%.

Full Answer Section

Based on these interest rates, I would choose to invest in Canada for one year. The expected yield for the next year is 2.48%, which is higher than the yields in the other countries. Additionally, Canada has a strong economy and a stable political environment, which makes it a good investment.

Here are some other factors that I considered when making my decision:

  • Creditworthiness: Canada has a AAA credit rating, which is the highest possible rating. This means that it is considered to be a very safe investment.
  • Currency risk: The Canadian dollar is relatively stable against the US dollar, which means that there is less risk of currency fluctuations.
  • Liquidity: The Canadian treasury market is very liquid, which means that it is easy to buy and sell Canadian treasury bonds.

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