Treasury management Exam Questions With Complete
Solutions
1. What are the major objectives of treasury management
(Chapter 1) Correct Answers Maintain liquidity
Optimize cash resources
Maintain access to short term financing
Manage investments
Maintain access to medium and long term financing
Manage financial risk
Coordinate financial functions and share financial information
Manage external vendors
1. What is a global institution and what are the primary services
that it offers? (Chapter 3) Correct Answers • One that operates
in multiple countries in more than 1 part of the world, providing
services to both domestic and multinational corporations
1. what is a payment system? (Chapter 4) Correct Answers • A
payment is series of processes and technologies that transfer
monetary value from one party to another. Payments are
typically made in exchange for the provision of goods and
services
1. What is the primary role that financial institutions play in the
economy and why are they regulated? (Chapter 2) Correct
Answers o Provide a mechanism for savers of capital to transfer
that capital to those who might best use it. Because this vital role
of capital transfer is fundamental to the efficient functioning of
the economy, FIs generally are regulated closely by monetary
and other government authorities.
,10. Define corporate governance. (Chapter 1) Correct Answers
The principles and processes by which any organization is
governed. It provides the guidelines for managing a company so
that it can fulfill its stated goals and objectives in a manner that
adds to the value of the company and is also beneficial for all
stakeholders in the LT
10. What are the major provisions of the Gramm-leach Bliley
act? (Chapter 2) Correct Answers o Permits the creation of
financial holding companies that can engage in any activity that
the fed considers financial in nature or incidental to it
o Establishes the fed as the primary regulator of FHCs which are
subject to consolidated capital requirements at the parent
company level and bank style risk management at all levels.
o Allows easier entry for foreign banks into the US fin. Services
market
o Includes key provision relating to consumer protection
including specific relations regarding the protection of
nonpublic personal info
10. what is SWIFT? (Chapter 4) Correct Answers • The society
for worldwide interbank financial telecommunications, it is not
only a payment system but a communication system used by
most of the banks in the world to transmit payment instructions
11. What are small value transfer or ACH systems?
(Chapter 4) Correct Answers • Small value transfer systems are
electronic networks for the exchange of smaller payment
instructions among FIs, typically on behalf of consumers.
, 11. What is required for a director to be considered independent
under NYSE standards (Chapter 1) Correct Answers The board
must determine that the director has no material relationship
with the listed company either directly or as a partner,
shareholder, or an officer to the organization
11. What is the Durbin amendment? (Chapter 2) Correct
Answers o Amendment to the Dodd-Frank Act provision
intended to limit debit card interchanges and fees and increase
competition in payment processing
12. What are the main provisions of the USA PATRIOT act?
(Chapter 2) Correct Answers o Impose significant obligations
upon nonbank FIs. It also includes nonfinancial entities
potentially handling large value transactions such as car, boat
plane and jewelry dealers
o Makes all foreign banks with accounts in the US subject to US
jurisdiction including the power to obtain records and info
regarding customers
o Prohibits all US banks from maintaining correspondent
accounts for any foreign shell banks which are defined as
foreign banks without a physical presence In any country
o Prevents US credit card system operators from authorizing
foreign banks to issue or accept US credit cards without talking
steps to prevent usage by terrorists
o Requires banks to know their customers, resulting in increased
due diligence before taking on new business
12. What are the major checks and balances that limit and
monitor management performance (Chapter 1) Correct Answers
To protect stockholders, corporate governance procedures
Solutions
1. What are the major objectives of treasury management
(Chapter 1) Correct Answers Maintain liquidity
Optimize cash resources
Maintain access to short term financing
Manage investments
Maintain access to medium and long term financing
Manage financial risk
Coordinate financial functions and share financial information
Manage external vendors
1. What is a global institution and what are the primary services
that it offers? (Chapter 3) Correct Answers • One that operates
in multiple countries in more than 1 part of the world, providing
services to both domestic and multinational corporations
1. what is a payment system? (Chapter 4) Correct Answers • A
payment is series of processes and technologies that transfer
monetary value from one party to another. Payments are
typically made in exchange for the provision of goods and
services
1. What is the primary role that financial institutions play in the
economy and why are they regulated? (Chapter 2) Correct
Answers o Provide a mechanism for savers of capital to transfer
that capital to those who might best use it. Because this vital role
of capital transfer is fundamental to the efficient functioning of
the economy, FIs generally are regulated closely by monetary
and other government authorities.
,10. Define corporate governance. (Chapter 1) Correct Answers
The principles and processes by which any organization is
governed. It provides the guidelines for managing a company so
that it can fulfill its stated goals and objectives in a manner that
adds to the value of the company and is also beneficial for all
stakeholders in the LT
10. What are the major provisions of the Gramm-leach Bliley
act? (Chapter 2) Correct Answers o Permits the creation of
financial holding companies that can engage in any activity that
the fed considers financial in nature or incidental to it
o Establishes the fed as the primary regulator of FHCs which are
subject to consolidated capital requirements at the parent
company level and bank style risk management at all levels.
o Allows easier entry for foreign banks into the US fin. Services
market
o Includes key provision relating to consumer protection
including specific relations regarding the protection of
nonpublic personal info
10. what is SWIFT? (Chapter 4) Correct Answers • The society
for worldwide interbank financial telecommunications, it is not
only a payment system but a communication system used by
most of the banks in the world to transmit payment instructions
11. What are small value transfer or ACH systems?
(Chapter 4) Correct Answers • Small value transfer systems are
electronic networks for the exchange of smaller payment
instructions among FIs, typically on behalf of consumers.
, 11. What is required for a director to be considered independent
under NYSE standards (Chapter 1) Correct Answers The board
must determine that the director has no material relationship
with the listed company either directly or as a partner,
shareholder, or an officer to the organization
11. What is the Durbin amendment? (Chapter 2) Correct
Answers o Amendment to the Dodd-Frank Act provision
intended to limit debit card interchanges and fees and increase
competition in payment processing
12. What are the main provisions of the USA PATRIOT act?
(Chapter 2) Correct Answers o Impose significant obligations
upon nonbank FIs. It also includes nonfinancial entities
potentially handling large value transactions such as car, boat
plane and jewelry dealers
o Makes all foreign banks with accounts in the US subject to US
jurisdiction including the power to obtain records and info
regarding customers
o Prohibits all US banks from maintaining correspondent
accounts for any foreign shell banks which are defined as
foreign banks without a physical presence In any country
o Prevents US credit card system operators from authorizing
foreign banks to issue or accept US credit cards without talking
steps to prevent usage by terrorists
o Requires banks to know their customers, resulting in increased
due diligence before taking on new business
12. What are the major checks and balances that limit and
monitor management performance (Chapter 1) Correct Answers
To protect stockholders, corporate governance procedures
