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Treasury Management Quiz 1 (30 MCQs)

Quiz Instructions

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1. The treasury staff uses the information it obtained from its cash forecasting and working capital management activities to ensure that sufficient cash is available for operational needs.
2. What are the responsibilities of a financial controller for managing liquidity?
3. The limit fixed by the Bank to its dealer to restrict loss due to adverse movement in the exchange rate is known as ..... limit
4. Acronym NOOPL stands for .....
5. Restricted cash can be either trapped cash (cash trapped in regulated jurisdictions or countries where attempts to repatriate cash face tax-unfriendly situations) and collateralized cash. The Treasurer looks for opportunities to use restricted cash in a net borrowing at another location and in doing so, get these funds set off from the balance sheet. Hence, while waiting for windows of opportunity to invest in the same country or repatriate back to the parent, the Treasurer will seek to optimize returns over time and also manage the currency aspect since the money is likely to be held in a local currency in that country.
6. The time between when the check is deposited and when it is available to the recipient is availability float
7. These gains and losses can be quite large, and would initially appear to be a good way to judge the hedging activity of the treasury staff
8. In the context of cash transfer controls, the acronym "AML" stands for Anti-Money Laundering.
9. It must be done in right quantity such as the acquisition of fixed assets, purchase of raw material, payment of expenses like rent, salary, bills, interest and so forth.
10. The company would be negatively impacted by disruption to operations or the financial supply chain due to a lack of financing or high market volatility.
11. Which is not a money market product?
12. Convertibility of a currency is indicated by its .....
13. Float typically does not reduces available liquidity and interest earnings or savings owing to the use of the company's own money. There could also be an opportunity loss of the funds.
14. Supporting financial control in the creation of a shared service centre to optimize the AR and AP processes
15. The treasury manager must ensure that the funds are available with the organizations in sufficient quantity.
16. What is the normal limit of the required Intermediary Macroprudential Ratio?
17. The securities contracted basically on account of Long term investment relationships or for steady income and statutory obligations are classified under (i) Held to Maturity (ii) Held for Trading
18. Policies are the basis of the operation of a treasury.
19. Which among the statements is a consideration of non-residents accounts?
20. The stock market is one of the most popular types of financial markets, the stock market trades shares of ownership of public companies
21. What are the controls that should be implemented for proper treasury management?
22. Shares which enjoy preference over payment of dividends are called .....
23. The higher the DPO is, the longer the period allowed to make the payment and hence the greater the use of cash. Some companies take an improving DPO project to be licensed to delay payments to suppliers. This is not a good practice. The AP for a company is the accounts receivable (AR) for its supplier. If the payment needs to be delayed, the terms have to be agreed on up front at the time of negotiation.
24. It is the periodic net settlement of specific outstanding payments between different entities or units. This is different from gross settlement, whereby each payment is made individually.
25. This is a company's designated long-term partner, with whom the company does the bulk of its business.
26. The financial market may have or not have the physical location and the exchange of the financial instruments and the financial securities may be exchanged between the parties over the phone or the internet as well.
27. Reconciliation is important in cash transfer controls to identify discrepancies and errors.
28. In addition to segregation controls and internal auditing, the treasurer should impose unlimited controls on a variety of transactions
29. Statement 1:Poor management of liquidity could result in a spike in interest expense to raise money in crisis situations, which impacts the company's profitability rather severely.; Statement 2:Stability of assets and liabilities, especially across debt and capital investments, is a good indicator of a firm 's control over its financial management.
30. Statement 1:Reporting is also an independent activity, and firms are moving towards automating it to reduce manual intervention and thus become timelier and more accurate.; Statement 2:Overreporting is also a danger, and hence the treasury policy must stipulate the formats, recipients, and frequency of regular reporting.
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