Module 16: Treasury management Certification Exam Example Questions And Answers Graded A+.

Treasury management - correct answer the management of money and financial risks in a business. Its priority is to ensure the business has the money it needs to manage its day-today business obligations, while also helping develop its long term financial strategy and policies. Four key areas of treasury management - correct answer - Liquidity management - Funding - Risk management - Corporate finance liquidity management - correct answer the short-term management of cash to ensure that the company has access to the right amount in a cost efficient manner risk managment - correct answer understanding and quantifying the risks faced by a company mainly currency and interest rate risk Corporate Finance - correct answer the examination of a company's financial strategies funding - correct answer deciding on suitable forms of finance and organising suitable bank and capital market debt treasury organisation - correct answer - the degree of centralisation of the treasury department - the company's attitude to risk advantages of having a centralised treasury department - correct answer Economies of scale Matching Control Expertise depending on a company's attitude to risk, treasury departments can be - correct answer Cost centres Cost saving centre Profit centre Controls required over treasury to ensure effective functioning - correct answer Unauthorised transactions Cultural problems Systems design Security Dealing by phone Counterparty risk Derivatives unauthorised transactions - correct answer involves the risk of money being misappropriated and the risk of unauthorised positions cultural problems with treasury - correct answer due to large sums of money involved individuals may try to hide any errors (Barings Bank) systems design for treasury - correct answer systems need to pick up changes in the market (e.g. love volume currency to high volume) controls due to dealings by phone - correct answer - record telephone calls - send hard copies of any deals - confirmations checked with bank confirmation - bank mandates must be in place - internal exposure limits