CPFO Treasury and Investment Management Exam Questions with Verified Answers ( Rated A+)
Treasury management - Answers involves the management of cash from the time revenue is earned to
the time an expenditure payment clears the bank
All cash management decisions should be made with considerations of - Answers legality, safety,
liquidity, and yield
Treasury management includes the systems and operating cycles - Answers
Establishing policies - Answers is part of the systems cycle
Forecasting cash flows is part of the - Answers operating cycle
Both internal and external players are included in - Answers treasury management processes
Risk - Answers is defined as the possibility of loss
Normally, the greater the risk taken, the - Answers greater the potential return
Treasury management goals are constrained by - Answers politics, past practices and unwillingness to
change, and the amount of risk
The most common cash management policy is - Answers the investment policy
Politics - Answers can play a part in the selection and maintenance of banking relationships
More than one bank may be selected to maintain accounts - Answers
Banks may be rotated periodically - Answers
Banks may be selected via - Answers competitive bid
Selection of a bank through competitive bid is usually - Answers the most cost effective and the decision
is based on business principles rather than politics
Lockbox collection systems allow banks to - Answers collect directly from a post office box, open, verify,
and process the payment.
Zero balance accounts - Answers allow checks to be presented for payment, creating intraday overdrafts
that are later swept out
Short-term credit services - Answers have a duration of less than one year
Additional interest earning, additional bank services, and reduced service charges may be obtained
through competition - Answers
The additional costs incurred by undertaking a competitive bid process are offset by - Answers the
additional interest earning and increased services offered by the bank for the same money
, Governments should be careful to request only services which are truly needed - Answers
Banks should be requested to submit their annual reports - Answers for the past 2 years
Cash flow forecast - Answers is a schedule of receipts and disbursements over a given time period
The first step in preparing a cash flow forecast is - Answers identifying all finds departments and
financial data in a government
A simple rule of thumb to evaluate separately on those revenue sources that - Answers individually
account for at least 15% of government tool revenues
LGIPs (Local Government Investment Pools) - Answers are a short-term investment vehicle used by
governments
Moving average is - Answers the most common forecasting method
Cash flow forecasting - Answers is most commonly done at the fund level
Most common cash flow forecasts are - Answers monthly
When considering the type of forecast to use, the type of information available, time period, and level of
detail needed are key factors - Answers
Cash available for investments - Answers = beginning cash + revenues - expenditures
The moving average method - Answers looks at past history
Cash and checks are a common form of collections - Answers
Checks are gradually being replaced by - Answers other methods of non-cash payments
The collection options available to local governments - Answers are greatly influenced by the trends in
consumer payment methods
Night deposit is - Answers a type of collection that allows the public to make payments after office hours
Night deposits - Answers are generally the most expensive for governments
The biggest disadvantage in credit card acceptance is - Answers the 1-2% processing fee
The general rule of thumb is that local governments should be able to collect - Answers 95% or more of
the current tax levy in the current fiscal year
float - Answers The lapse time between the deposit of a check and the time it is paid by the bank is
known as
Mail float - Answers is the amount of time a payment remains in the mail system from the time sent to
the government until the government has physical possession of the check
Treasury management - Answers involves the management of cash from the time revenue is earned to
the time an expenditure payment clears the bank
All cash management decisions should be made with considerations of - Answers legality, safety,
liquidity, and yield
Treasury management includes the systems and operating cycles - Answers
Establishing policies - Answers is part of the systems cycle
Forecasting cash flows is part of the - Answers operating cycle
Both internal and external players are included in - Answers treasury management processes
Risk - Answers is defined as the possibility of loss
Normally, the greater the risk taken, the - Answers greater the potential return
Treasury management goals are constrained by - Answers politics, past practices and unwillingness to
change, and the amount of risk
The most common cash management policy is - Answers the investment policy
Politics - Answers can play a part in the selection and maintenance of banking relationships
More than one bank may be selected to maintain accounts - Answers
Banks may be rotated periodically - Answers
Banks may be selected via - Answers competitive bid
Selection of a bank through competitive bid is usually - Answers the most cost effective and the decision
is based on business principles rather than politics
Lockbox collection systems allow banks to - Answers collect directly from a post office box, open, verify,
and process the payment.
Zero balance accounts - Answers allow checks to be presented for payment, creating intraday overdrafts
that are later swept out
Short-term credit services - Answers have a duration of less than one year
Additional interest earning, additional bank services, and reduced service charges may be obtained
through competition - Answers
The additional costs incurred by undertaking a competitive bid process are offset by - Answers the
additional interest earning and increased services offered by the bank for the same money
, Governments should be careful to request only services which are truly needed - Answers
Banks should be requested to submit their annual reports - Answers for the past 2 years
Cash flow forecast - Answers is a schedule of receipts and disbursements over a given time period
The first step in preparing a cash flow forecast is - Answers identifying all finds departments and
financial data in a government
A simple rule of thumb to evaluate separately on those revenue sources that - Answers individually
account for at least 15% of government tool revenues
LGIPs (Local Government Investment Pools) - Answers are a short-term investment vehicle used by
governments
Moving average is - Answers the most common forecasting method
Cash flow forecasting - Answers is most commonly done at the fund level
Most common cash flow forecasts are - Answers monthly
When considering the type of forecast to use, the type of information available, time period, and level of
detail needed are key factors - Answers
Cash available for investments - Answers = beginning cash + revenues - expenditures
The moving average method - Answers looks at past history
Cash and checks are a common form of collections - Answers
Checks are gradually being replaced by - Answers other methods of non-cash payments
The collection options available to local governments - Answers are greatly influenced by the trends in
consumer payment methods
Night deposit is - Answers a type of collection that allows the public to make payments after office hours
Night deposits - Answers are generally the most expensive for governments
The biggest disadvantage in credit card acceptance is - Answers the 1-2% processing fee
The general rule of thumb is that local governments should be able to collect - Answers 95% or more of
the current tax levy in the current fiscal year
float - Answers The lapse time between the deposit of a check and the time it is paid by the bank is
known as
Mail float - Answers is the amount of time a payment remains in the mail system from the time sent to
the government until the government has physical possession of the check
