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.
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.