Treasury Bills Essay Example for Free

Treasury Bills Essay INTRODUCTION Executive Summary Investment is the process of putting excess funds of an individual, groups or companies in ventures that will have better returns.   For the investment to be viable, a stream of benefits must be anticipated in future years.   Investment can either be a short term or long term.   The best investment option for the company or individual is always based on availability of funds to be committed and for how long.   Short term investment always is made when an individual wants to recoup his funds quickly and normally periods of less than two years period.    The interest cost associated with it is always very small and can be ignored. Long term investment involves a long period to recoup the investment outlay. Most firms are at cross roads they are not sure where to invest the excess funds which can be either in the mutual fund or treasury bills.   The decision to put the money in either of the option will depend on the following; How long will the funds be available? What is cost of capital to be used? Liquidity of the firm What other long-term and short term projects planned? What is the attitude towards risk? What is the government policy on investment? In order for me to come up with proper decision where to invest, we are undertaking a project to overcome the factors mentioned above.   The objectives of the project will be:- To identify the better investment at times excess of funds in the short-run To identify the better investment at times of excess funds in the long-run To identify the risky investment among the two Which of the two affects the liquidity of the fund in the long-run? Statement of the problem Investment decisions are very important at times of excess funds or little funds.   The investment in mutual funds or treasury bills is always a problem to individuals and companies.   Companies or individuals without financial advisors may be faced with problem of choice. 1.3 Goals In making an investment of funds that are available, the investor needs to identify which investment is ideal; the treasury bills or money market mutual fund. 1.4 Objectives or tasks The objectives of the study will be based on the following:- Which of the two has less risk? What are the interest rates that are offered? What has been the performance of each in the past? What are the certainty recouping funds in full at times of inflation? Which attracts less tax? Who has issued the Treasury bill or mutual fund? From past records mutual funds are riskier as compared to Treasury bill.   This is because it is assured that governments will honour their entire obligation as compared institutions.   Governments can not become insolvent being issuers of treasury bills except one that past a resolution in parliament not honour their debts. Treasury bills always offer a lower rate as compared to mutual funds money market.   Treasury bills are either 90 day or 180 day periods which can be rolled over in case the investor does not need the funds immediately. The project will cost 2400 to its completion.   The funding will be provided by the Scholarship Provider. Editing The report will compile and analysed after the data has been collected.   The report will be written by James and taken for typesetting at Mary’s place.   After typesetting the report will be printed and copies given to James, Joseph, John, Mary, Asnata and Jane for checking and editing to produce a good copy.   After the editing each editing member contributions will forward to Mr. Johnson for inputting and typeset document, a final draft will be produced. All names are imaginary Action and Recommendation 1 Layout The project report will be forty four pages, typeset on font size of 12, double spaced, with one –page abstract.   It will contain introduction, problem statement, goals and the financial statement for project.   It will be produced and spiral bound. 3.2 Table Timetable Action Time Description Research Begin 14/7/07 End 28/7/07 Ø   Research method will be chosen Ø   Develop research capability Ø   Identify the investors to be used Ø   Identify methods used in the research Ø   Identify other sources to referenced Ø   Prepare research questionnaire for interviews Writing 29/7/07 To 31/7/07 Ø   Compile and analysis the research data Ø   Tabulate the information gathered Ø   Choose the format of report writing Ø   Choose writers for the report and give them directions Ø   Write and type write the data Editing 1/8/07 To 3/8/07 Ø   Choose editors of the report from among the participants Ø   Print a rough draft for editing Ø   Editing takes places Ø   Print the edited copy and ask them to redit it Printing 4/8/07 The report is printed out as per number of copies needed Binding 5/8/07 10/8/07 Ø   The report is taken for editing before distribution Ø   The report is distributed Budget for the Project Activity Description Cost Research Ø   Research method will be chosen Ø   Develop research capability Ø   Identify the investors to be used Ø   Identify methods used in the research Ø   Identify other sources to referenced Ø   Prepare research questionnaire for interviews 1200 Writing Ø   Compile and analysis the research data Ø   Tabulate the information gathered Ø   Choose the format of report writing Ø   Choose writers for the report and give them directions Ø   Write and type write the data 300 Editing Ø   Choose editors of the report from among the participants Ø   Print a rough draft for editing Ø   Editing takes places Ø   Print the edited copy and ask them to reedit it 200 Printing The report is printed out as per number of copies needed 500 Binding Ø   The report is taken for editing before distribution Ø   The report is distributed 100 TOTAL 2400 3.3 Outline The project will have six sections. Executive summary:   will summarize the whole report Introduction: This will contain statement of the problem Interactive review:   This will have a review of the existing research materials on the topic of research. Research: Methods used in the research and how data is collected Data analysis: This will contain the research data its analysis and tabulation   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚     REFERENCES    Eugene Brigham, Michael Ehrhardt; Financial Management, Theory and Practice, Thomson South-Western, 2005 Robert Hudson, Alan Colley; The Capital Markets Financial Management in   Banking, Lessons Professional, 2000 Neil H†erman Jacoby, Raymond Joseph; Business Finance and Banking, Ayer Pub, 2000 Naciones Unidas Transnational Corporations Management Division, M Moffett, International Financial Management, Routledge 1993