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NEW QUESTION # 493
The Cash Manager of ABC Logistics, Inc. sets a daily cash position by noon. All departments have been given an 11 a.m. cut-off for presenting wire requests and 2 p.m. for ACH requests. A wire request came in at 3:30 p.m. to make an insurance premium payment, in order to receive a discount. What liquidity reserve requirement is impacted?
- A. Opportunistic
- B. Regulatory
- C. Transaction
- D. Precautionary
Answer: A
NEW QUESTION # 494
A United States corporation purchases finished products from a German subsidiary and sells raw materials to the subsidiary several times in one month. To minimize foreign exchange transaction costs, the U.S. corporation's cash manager would MOST LIKELY use:
- A. forward options.
- B. pooling.
- C. multilateral netting.
- D. bilateral netting.
Answer: D
NEW QUESTION # 495
ABC Company is a net borrower with a weighted average cost of capital of 11.5%. What kind of bank fee arrangement is it likely to prefer?
- A. Average fee compensation
- B. Fee compensation
- C. Balance compensation
- D. Average balance compensation
Answer: B
NEW QUESTION # 496
In a partial reconciliation, a bank provides a company with which of the following?
- A. Listing of paid items
- B. Listing of outstanding checks
- C. Electronic account analysis
- D. Listing of issued items
Answer: A
NEW QUESTION # 497
Which of the following statements BEST applies when evaluating fees in an RFP for bank services?
- A. Flexible credit terms are the most important consideration.
- B. Ability of financial institution to customize services is critical.
- C. Accurate evaluation and comparison of the proforma account analysis statements are critical.
- D. A proforma account analysis statement captures all pricing and compensation detail.
Answer: C
NEW QUESTION # 498
Which two of the following are necessary to calculate average collected balances?
I. Deposit float
II. Reserve requirements
III. Ledger balance
IV.
Earnings credit rate
- A. I and II
- B. III and IV
- C. II and IV
- D. I and III
Answer: D
NEW QUESTION # 499
A pizza restaurant chain maintains separate accounts at bank branches near each of their 1,067 restaurants to handle the deposit of cash received. Early each morning, the company's point-of-sale system electronically transmits collection totals from the previous day to its main computer. ACH debits are then initiated to concentrate the funds from the local accounts to the concentration account the following day. Recently, several of the ACH debits have been returned for insufficient funds because deposits weren't being taken to the bank on a timely basis by the local employees. Without increasing staff at the restaurants, what could Treasury do to prevent this from happening and avoid overdrafts at the local banks?
- A. Use a courier to deposit to each bank 3 times per week.
- B. Negotiate better float schedules at its local banks.
- C. Install smart safes at each restaurant location.
- D. Use wire transfers to concentrate the cash instead of ACH.
Answer: C
NEW QUESTION # 500
Owners of a privately-held company have decided to sell the business, but are receiving
offers dramatically lower than what the firm is worth (as estimated by the owners). Which of the following options is the BEST way for management to establish the true value of their company?
- A. Alter the capital structure by issuing more debt.
- B. Repurchase shares to elevate stock price.
- C. Increase the dividend payout ratio.
- D. Issue stock to the public through an IPO.
Answer: D
NEW QUESTION # 501
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A company has negotiated a credit facility with the following terms:
$5,000,000 line of credit $3,000,000 average borrowing 30 basis point commitment fee on the unused portion of the line Interest rate on advances is 1-month LIBOR plus 4% 1-month LIBOR is currently 2%
What is the annual interest rate on the line of credit?
- A. 6.0%
- B. 9.0%
- C. 6.2%
- D. 9.3%
Answer: C
NEW QUESTION # 502
The time between receipt of a mailed payment and the deposit of the payment in the payee's account is known as:
- A. mail float.
- B. processing float.
- C. collection float.
- D. availability float.
Answer: B
NEW QUESTION # 503
A properly designed concentration system will potentially achieve which of the following results?
I) Increased authority to field offices
II) Increased investment income
III) Improved ability to take discounts
IV) Reduced dependence on third-party concentration vendors
- A. II and III only
- B. IV only
- C. II, III, and IV only
- D. I and II only
Answer: A
NEW QUESTION # 504
Treasury uses which of the following internal sources of information in its daily operations?
- A. Sales and purchasing summaries
- B. Marketing reports
- C. Product development plans
- D. Information technology budgets
Answer: A
NEW QUESTION # 505
Which of the following are differences between securities issued through the primary and
private capital markets?
I.Cost of issuance and speed of execution II.Investor base III.Reasons for the offering IV.Registration requirements
- A. I, II, and IV
- B. II, III, and IV
- C. I and III
- D. II and IV
Answer: A
NEW QUESTION # 506
The time between when the payor mails the check and the payee receives available funds is known as:
- A. mail float.
- B. processing float.
- C. collection float.
- D. availability float.
Answer: C
NEW QUESTION # 507
A manager has prepared an analysis of five investment alternatives. Prior to selecting which alternative to invest funds in, the manager calculated the anticipated return for all options. The manager is only going to invest in one alternative. The four investments that are not chosen are:
- A. an opportunity cost.
- B. a loss of leverage.
- C. a cost benefit.
- D. a cost of capital.
Answer: A
NEW QUESTION # 508
Which of the following is NOT a short-term cash forecasting technique?
- A. Distribution forecast
- B. Accounts receivable balance pattern forecast
- C. Income statement forecast
- D. Receipts and disbursements forecast
Answer: C
NEW QUESTION # 509
RAL Capital, a lean global financial service provider with revenues of $8 billion, has 10 regional offices located around the world. The RAL global trading groups are structured as profit centers with each center having its own profitability targets. The group's clients consist of large multinational corporations and financial institutions that require the buying and selling of large amounts of currency. The Treasurer is considering reorganizing his department into a profit center. The group processes millions of transactions every year. What is a downside of this scenario?
- A. May become a viable candidate for downsizing or outsourcing.
- B. Pressure to produce significant profits may lead to deferred losses and inefficient operations.
- C. Need to decentralize treasury operations in order to make a profit center more viable.
- D. Substantial headcount is required to support a profit generation center.
Answer: B
NEW QUESTION # 510
Based on the following information, what is the required collected balance to cover all monthly service charges?
Deposit Float$10,000 Reserve Requirement5% Earnings Credit Rate15% Monthly Service Charges$6,000 Days in month30
- A. $486,667
- B. $456,000
- C. $512,281
- D. $308,222
Answer: C
NEW QUESTION # 511
A company is starting a project to redesign its cash management information systems. What would be an important tool in this effort?
- A. Treasury workstation
- B. ERP software
- C. Cash application
- D. Treasury operations manual
Answer: D
NEW QUESTION # 512
An international company would establish a re-invoicing center for which of the following reasons?
- A. To manage the foreign exchange exposure of its foreign subsidiaries
- B. To bring transaction exposures more closely in line with economic exposures
- C. To take advantage of interest-bearing demand deposits
- D. To reduce its international balance reporting charges
Answer: A
NEW QUESTION # 513
An internal auditor discovers that employees can enter and approve their own wire transfers. This practice violates what internal control?
- A. Proper authorization of investment transactions
- B. Accurate reporting of cash transactions
- C. Appropriate monitoring of covenant compliance
- D. Adequate segregation of duties
Answer: D
NEW QUESTION # 514
A bank issues a letter of credit (L/C) and receives a request for payment under the L/C. The buyer notifies the issuing bank not to make payment because there is a dispute over the quality of the merchandise. However, the documents received fully comply with the terms of the L/C. Which of the following statements is true?
- A. The bank must make payment and is entitled to immediate reimbursement from the buyer.
- B. The bank may delay payment, provided the seller is notified of the dispute within three business days.
- C. The buyer may immediately return the merchandise and cancel the L/C.
- D. The bank may delay payment until reimbursed by the buyer.
Answer: A
NEW QUESTION # 515
Which of the following are KEY issues to be considered when establishing a shared service center (SSC)?
I. Selecting the location
II. Comparing an SSC structure to outsourcing of a process
III. Choosing and implementing the technology for SSC
IV.
Choosing the collection bank
- A. I and III only
- B. II and IV only
- C. I, II, and III only
- D. II, III, and IV only
Answer: C
NEW QUESTION # 516
A dealer is selling securities to a client. What is the yield/price at which the dealer will sell?
- A. Market price
- B. Bid price
- C. Ask price
- D. After-tax price
Answer: C
NEW QUESTION # 517
An international organization has decided to move its treasury operations to the head office
in Paris, France. The company's goal is to establish the treasury as the primary provider of banking services and all company financing. What would the new proposal be an example of?
- A. An in-house bank and a centralized organization
- B. A hybrid treasury structure
- C. A decentralized and a re-engineered organization
- D. An outsourced shared service center
Answer: A
NEW QUESTION # 518
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