Chapter 1 – TM Review Practice Exam Questions.

Chapter 1 – TM Review Practice Exam Questions. A main characteristic of a company with regional offices using a centralized treasury function is: A. high level of control. B. increased borrowing costs. C. centrally determined depository accounts. D. increased operating costs. - CORRECT ANSWER A. high level of control. In order to be defined as independent, a corporate director: A. cannot have owned preferred stock shares in the company. B. cannot have a material relationship with the company. C. cannot meet regularly with executive management outside of board meetings. D. cannot have been an employee with the company during the past three years. - CORRECT ANSWER B. cannot have a material relationship with the company. EML Inc., which has $600 million in outstanding debt, is preparing to issue commercial paper in excess of $100 million within the next six months. The new assistant treasurer has recently spent time getting to know the issuing and paying agent, the rating agency analyst, and the legal counsel, and has been following the financial markets. What is this is an example of? A. Benchmarking with peers B. External collaboration C. Decentralized control D. Risk transfer - CORRECT ANSWER B. External collaboration The MOST common way that companies structure their treasury operations is as a(n): A. cost center. B. profit center. C. shared service center. D. in-house bank. - CORRECT ANSWER A. cost center. The items listed below are some of the major objectives of treasury management. What is another of these objectives? A. Prioritize investments for profit. B. Perform financial planning and analysis. C. Optimize cash resources. D. Set organizational strategy. - CORRECT ANSWER C. Optimize cash resources.