Precautionary Savings with Risky Assets: When Cash Is Not Cash

  1. Poor
  2. Satisfactory
  3. Good
  4. Very Good
  5. Excellent

Be the first. (0 ratings)

CFA Digest
August 2017 | Vol. 47 | No. 8
Source: CFA Institute
Ran Duchin Thomas Gilbert Jarrad Harford Christopher Hrdlicka
Imrith Ramtohul, CFA (Reviewer)



US industrial firms tend to invest significantly in noncash risky financial assets—for example, corporate debt, equity, and mortgage-backed securities. Such risky assets make up 38% of the firms’ financial portfolios, or 6% of total book assets. These assets are held mainly by financially unconstrained firms and by poorly governed firms. Nonfinancial firms may thus be operating in a “shadow” asset management industry subject to minimal regulation and disclosure requirements.

View more information

Credits · About the CE Program
0 CE (including 0 SER) Manage CE Credits

People who viewed this page also viewed:

Online Course
Building a Financial Model in Excel
Corporate Finance Institute
Alternative Investments Portfolio Management (2018)
CFA Institute: Refresher Readings

Loading ...