CHAPTER 1 - THE ROLE OF TREASURY MANAGEMENT QUESTIONS AND CORRECT ANSWERS

CHAPTER 1 - THE ROLE OF
TREASURY MANAGEMENT
QUESTIONS AND CORRECT
ANSWERS
CashA2ManagementA2-A2Ans--
IncludesA2collections,A2disbursements,A2banking,A2andA2shortA2termA2borrowingA2andA2inv
esting

TreasuryA2MangementA2-A2Ans--
TheA2broaderA2topicA2thatA2goesA2beyondA2simpleA2cashA2managementA2toA2dealA2withA2l
ongerA2termA2borrowingA2andA2investing,A2capitalA2management,A2andA2operational,A2fina
ncial,A2andA2reputationsA2risk.A2TheA2safeguardingA2andA2efficientA2useA2ofA2financialA2ass
etsA2forA2theA2benefitA2ofA2aA2companyA2andA2itsA2variousA2stakeholders.

TreasuryA2ManagementA2-A2Ans--
TheA2primaryA2goalA2ofA2__A2isA2toA2manageA2theA2cashA2andA2relatedA2financialA2assetsA2
ofA2anA2organizationA2asA2efficientlyA2asA2possibleA2toA2provideA2theA2financialA2flexibilityA2
neededA2toA2achieveA2theA2orgsA2objectivesA2inA2aA2mannerA2consistentA2withA2theA2orgsA
2overallA2strategicA2plan.


ShortA2TermA2-A2Ans--
TheA2__A2__A2goalA2ofA2TreasuryA2isA2toA2performA2crucialA2dailyA2liquidityA2ManagemenA2
tasksA2thatA2helpA2ensureA2theA2availabilityA2ofA2adequateA2cashA2resourcesA2neededA2toA
2sustainA2ongoingA2operations.


LongA2TermA2-A2Ans--
TheA2__A2__A2goalA2ofA2treasuryA2isA2toA2performA2criticalA2financeA2functionsA2thatA2ensur
eA2theA2availabilityA2ofA2fundsA2andA2informationA2necessaryA2toA2sustainA2seniorA2manag
ementsA2initiativesA2thatA2supportA2theA2organizationsA2overallA2financialA2objectives.

TreasuryA2ManagementA2-A2Ans--TheA2majorA2objectivesA2ofA2__A2__A2include:
1.A2MaintainA2liquidity
2.A2OptimizeA2cashA2resources
3.A2MaintainA2accessA2toA2shortA2termA2financing
4.A2ManageA2investments
5.A2MaintainA2accessA2toA2medium-A2long-termA2financing
6.A2ManageA2financialA2risk
7.A2CoordinateA2financialA2functionsA2andA2shareA2financialA2informationA2
9.A2ManageA2externalA2vendors

, LiquidityA2-A2Ans--
AnA2objectiveA2ofA2treasuryA2management;A2MaintainA2__A2meansA2toA2ensureA2theA2com
pany'sA2abilityA2toA2meetA2currentA2andA2futureA2financialA2obligationsA2InaA2costA2effectiv
eA2manner.

CashA2ResourcesA2-A2Ans--
AnA2objectiveA2ofA2treasuryA2management;A2OptimizeA2__A2__A2meansA2toA2establishA2pol
iciesA2andA2proceduresA2andA2implementA2strategiesA2thatA2manageA2holdingsA2ofA2none
arningA2cashA2balancesA2whileA2providingA2adequateA2liquidity.A2InvestA2excessA2cashA2b
alancesA2toA2generateA2interestA2incomeA2orA2payA2downA2debtA2toA2reduceA2interestA2exp
enses.

ShortA2TermA2-A2Ans--
AnA2objectiveA2ofA2treasuryA2management;A2MaintainA2accessA2toA2__A2__A2financingA2me
ansA2toA2establishA2andA2maintainA2reliableA2accessA2toA2shortA2termA2borrowingA2facilitie
sA2atA2theA2lowestA2costA2possible.A2UseA2shortA2termA2borrowingA2facilitiesA2toA2financeA2
company'sA2workingA2capitalA2gapA2createdA2whenA2theA2operatingA2cycleA2producedA2ca
shA2outflowsA2thatA2precedeA2cashA2inflows.

InvestmentsA2-A2Ans--
AnA2objectiveA2ofA2treasuryA2management;A2MaintainA2__A2meansA2toA2investA2excessA2fi
ndsA2inA2aA2prudentA2mannerA2forA2bothA2shortA2andA2longA2termA2needs.A2TheA2preservat
ionA2ofA2principleA2isA2theA2primaryA2objective,A2followedA2byA2ensuringA2liquidityA2andA2m
aximizingA2overallA2return.A2InvestmentA2activitiesA2shouldA2alsoA2beA2conductedA2inA2acc
ordanceA2withA2aA2board-approvedA2investmentA2policy.

MediumA2-A2Ans--
AnA2objectiveA2ofA2treasuryA2management;A2MaintainA2accessA2toA2__A2andA2longA2termA2
debtA2andA2equityA2financingA2toA2supportA2plannedA2assetA2expansionA2asA2wellA2asA2the
A2firmsA2existingA2assetA2base.A2ProvideA2theA2financialA2flexibilityA2necessaryA2toA2exertA2
strategicA2actionA2whenA2investmentA2opportunitiesA2arise.

FinancialA2RiskA2-A2Ans--
AnA2objectiveA2ofA2treasuryA2management;A2ManageA2__A2__A2meansA2toA2identify,A2mea
sure,A2analyze,A2andA2mitigateA2orA2remediateA2aA2company'sA2exposureA2toA2manyA2type
sA2ofA2financialA2riskA2(e.g.,A2interestA2rate,A2foreignA2exchange,A2counterparty,A2andA2ope
rational).A2IncludesA2protectingA2overallA2financialA2assetsA2fromA2lossA2orA2theft.

FinancialA2FunctionsA2-A2Ans--
AnA2objectiveA2ofA2treasuryA2management;A2CoordinateA2__A2__A2andA2shareA2financialA2i
nformationA2meansA2toA2collaborateA2withA2otherA2internalA2divisionsA2andA2departmentsA2
toA2coordinateA2financialA2functionsA2andA2shareA2financialA2information.A2EffectiveA2com
municationA2withA2otherA2divisionsA2andA2functionsA2isA2essentialA2toA2ensureA2theA2achie
vementA2ofA2treasury'sA2goalA2toA2utilizeA2cashA2asA2efficientlyA2asA2possible.