Treasury Management Final
A U.S. company has a secured committed line of credit of $5.5 million and has an available balance of $4
million. The company successfully transmitted a $5.5 million wire transfer instruction out to the bank via
SWIFT. The bank contacted the company and informed it that the wire transfer would not be processed.
What is the MOST LIKELY reason the bank gave the company?
A. Wires exceeding $5 million cannot be transmitted using SWIFT
B. The bank imposed a guidance line of credit on the account
C. The company exceeded its balance requirement
D. The bank refused funding on the company s discretionary line of credit - correct answer
B. The bank imposed a guidance line of credit on the account
A company has asked its marketing, payroll and sales teams to collaborate in finding a solution that
could augment its customer base, reduce payroll cost and increase sales. The solution has to be market
ready. Which of the following will serve all 3 purposes?
A. Ghost cards
B. Smart cards
C. PIN based cards
D. Stored value card - correct answer D. Stored Value Card
Company XYZ is now required to make electronic payments by its suppliers. To prevent an increase in
costs, the company should:
A. Negotiate a change in payment timing with its suppliers
B. Institute a just-in-time inventory system
C. Negotiate a change in cash disbursement with its concentration bank
D. Institute a modified RSA system for its inventory - correct answer A. Negotiate a
change in payment timing with its suppliers
Making payments through electronic payments networks can be a part of a treasury management
system s functionality, but it is subject to numerous constraints. Which of the following is a true
statement of those constraints?
A. The process is easy for the payee but very intensive manually for the payor
,B. Negotiation of trade terms is required, but float terms are excluded
C. Remittance detail, whether a lot or a little, can be easily included with all payment forms
D. Collecting payment-routing details, and populating these into the software, is a significant task -
correct answer D. Collecting payment-routing details, and populating these into the
software, is a significant task
A merchant presents 2 different batches of credit card transactions for processing, each batch has the
same dollar value and number of transactions, but the fees are different. Which of the following explains
why?
A. Use of a different terminal
B. Goods or services sold
C. Type of card accepted
D. Time of batch closure - correct answer C. Type of card accepted
Which of the following can be considered key responsibilities of daily cash management? I. Overseeing
compensation for bank services II. Management of short-term borrowing and investing III. Projecting
future cash shortages and surpluses
A. I only
B. I and II only
C. II and III only
D. I, II, and III - correct answer D. I, II, and III
A company can pay their supplier by check or by electronic transfer. If the difference between the value
date of the payment methods is 4 days from the company s perspective, what discount should the
supplier offer them to get the company to pay on the same day as they did when they paid by check
(rounded to the nearest 100th percent)? Assume no difference in the cost of the payment method, an
opportunity cost of 8%, and float neutrality.
A. 2.00%
B. 0.09%
C. 0.87%
D. 0.02% - correct answer B. 0.09%
, A properly designed concentration system will potentially achieve which of the following results? I.
Increased authority to field offices II. Increased investment income III. Improved ability to take discounts
IV. Reduced dependence on third-party concentration vendors
A. IV only
B. I and II only
C. II and III only
D. II, III, and IV only - correct answer C. II and III only
A company has grown quickly in the eurozone market. It wants to maximize its excess cash. Which
would be the BEST method of concentrating funds?
A. Bank Overlay
B. Notional Pooling
C. Physical Pooling
D. Scheduled Transfer - correct answer C. Physical Pooling
Company ABC experienced a loss in the past when an employee in the treasury department was able to
transfer $1.5 million to a personal account offshore. The company is working with a security agent to
prevent this from happening in the future. ABC also accepts a large number of checks as payment. The
agent has suggested upgrades to ABC s payment process. What step should be taken to help mitigate
this type of risk in the future?
A. Securely store check stock
B. Set up international bank security
C. Implement dual approval
D. Implement data security standards - correct answer C. Implement dual approval
Which two of the following are optimal uses for short-term excess cash? I. Pay down credit lines II. Make
overnight investments III. Repurchase stock IV. Make capital expenditures
A. I and II
B. I and III
C. II and III
D. II and IV - correct answer A. I and II
A U.S. company has a secured committed line of credit of $5.5 million and has an available balance of $4
million. The company successfully transmitted a $5.5 million wire transfer instruction out to the bank via
SWIFT. The bank contacted the company and informed it that the wire transfer would not be processed.
What is the MOST LIKELY reason the bank gave the company?
A. Wires exceeding $5 million cannot be transmitted using SWIFT
B. The bank imposed a guidance line of credit on the account
C. The company exceeded its balance requirement
D. The bank refused funding on the company s discretionary line of credit - correct answer
B. The bank imposed a guidance line of credit on the account
A company has asked its marketing, payroll and sales teams to collaborate in finding a solution that
could augment its customer base, reduce payroll cost and increase sales. The solution has to be market
ready. Which of the following will serve all 3 purposes?
A. Ghost cards
B. Smart cards
C. PIN based cards
D. Stored value card - correct answer D. Stored Value Card
Company XYZ is now required to make electronic payments by its suppliers. To prevent an increase in
costs, the company should:
A. Negotiate a change in payment timing with its suppliers
B. Institute a just-in-time inventory system
C. Negotiate a change in cash disbursement with its concentration bank
D. Institute a modified RSA system for its inventory - correct answer A. Negotiate a
change in payment timing with its suppliers
Making payments through electronic payments networks can be a part of a treasury management
system s functionality, but it is subject to numerous constraints. Which of the following is a true
statement of those constraints?
A. The process is easy for the payee but very intensive manually for the payor
,B. Negotiation of trade terms is required, but float terms are excluded
C. Remittance detail, whether a lot or a little, can be easily included with all payment forms
D. Collecting payment-routing details, and populating these into the software, is a significant task -
correct answer D. Collecting payment-routing details, and populating these into the
software, is a significant task
A merchant presents 2 different batches of credit card transactions for processing, each batch has the
same dollar value and number of transactions, but the fees are different. Which of the following explains
why?
A. Use of a different terminal
B. Goods or services sold
C. Type of card accepted
D. Time of batch closure - correct answer C. Type of card accepted
Which of the following can be considered key responsibilities of daily cash management? I. Overseeing
compensation for bank services II. Management of short-term borrowing and investing III. Projecting
future cash shortages and surpluses
A. I only
B. I and II only
C. II and III only
D. I, II, and III - correct answer D. I, II, and III
A company can pay their supplier by check or by electronic transfer. If the difference between the value
date of the payment methods is 4 days from the company s perspective, what discount should the
supplier offer them to get the company to pay on the same day as they did when they paid by check
(rounded to the nearest 100th percent)? Assume no difference in the cost of the payment method, an
opportunity cost of 8%, and float neutrality.
A. 2.00%
B. 0.09%
C. 0.87%
D. 0.02% - correct answer B. 0.09%
, A properly designed concentration system will potentially achieve which of the following results? I.
Increased authority to field offices II. Increased investment income III. Improved ability to take discounts
IV. Reduced dependence on third-party concentration vendors
A. IV only
B. I and II only
C. II and III only
D. II, III, and IV only - correct answer C. II and III only
A company has grown quickly in the eurozone market. It wants to maximize its excess cash. Which
would be the BEST method of concentrating funds?
A. Bank Overlay
B. Notional Pooling
C. Physical Pooling
D. Scheduled Transfer - correct answer C. Physical Pooling
Company ABC experienced a loss in the past when an employee in the treasury department was able to
transfer $1.5 million to a personal account offshore. The company is working with a security agent to
prevent this from happening in the future. ABC also accepts a large number of checks as payment. The
agent has suggested upgrades to ABC s payment process. What step should be taken to help mitigate
this type of risk in the future?
A. Securely store check stock
B. Set up international bank security
C. Implement dual approval
D. Implement data security standards - correct answer C. Implement dual approval
Which two of the following are optimal uses for short-term excess cash? I. Pay down credit lines II. Make
overnight investments III. Repurchase stock IV. Make capital expenditures
A. I and II
B. I and III
C. II and III
D. II and IV - correct answer A. I and II
