Treasury Management Review Questions with Complete Answers (Already Passed)
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Course
Treasury Management
Institution
Treasury Management
Treasury Management Review Questions with Complete Answers (Already Passed)
1. What are the major objectives of treasury management (Chapter 1) - Answers Maintain liquidity
Optimize cash resources
Maintain access to short term financing
Manage investments
Maintain access to medium and lo...
Treasury Management Review Questions with Complete Answers (Already Passed)
1. What are the major objectives of treasury management (Chapter 1) - 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
2. Which of these objectives make up working capital management (Chapter 1) - Answers Maintain
liquidity
Optimize cash resources
Maintain access to short term financing
Manage investments
3. Why is effective management of working capital critical to an organization (Chapter 1) - Answers
Working capital management is the foundation of effective treasury management. Without access to
cash to pay vendors and employees, companies cannot operate. Many profitable companies have been
forces to close their doors because of insufficient liquidity due to poor cash management.
4. What are the typical responsibilities of a treasurer (Chapter 1) - Answers Managing overall financial
risk, including FX risk.
Arranging ST and LT external financing
Managing relationships with banks and other service providers
Overseeing day to day liquidity and cash management
Investing for ST and LT
Developing and implementing treasury policies and procedures
Managing domestic and international payments
5. What are the typical responsibilities of a credit manager (Chapter 1) - Answers The credit manager
preserves and collects accounts receivable, sets corporate credit policies, approves the extension of
, credit terms and exposure to limits to customers and establishes information systems to monitor
accounts receivables.
6. What are some typical activities for which a board of directors might grant authority to individuals
within treasury organizations (Chapter 1) - Answers Open close and modify bank accounts
Establish credit facilities
Oversee investments
Issue debt and equity securities
Devise implement and execute risk management strategies
7. What are the 6 tasks involved in daily cash management (Chapter 1) - Answers Preparing a cash
position worksheet
Monitoring cash balances on deposit at financial institutions
Collecting concentrating and disbursing cash
Investing and borrowing funds on a ST basis when needed
Researching and reconciling exception items such as unexpected charges on bank accounts missing
deposits and uncleared checks
Coordinating efforts with other finance areas such as AR AP tax and accounting
8. What is the downside of making treasury a cost center? (Chapter 1) - Answers The downside to
making treasury a cost center is that management may focus on the cost of treasury operations and not
the value provided by the function, leading to difficulties in obtaining appropriate budget and staff
9. Why are shared services centers (SSCs) typically deployed (Chapter 1) - Answers Reduce the costs of
multiple or duplicate operations
Standardize the process
Increase the quality and timelines of services
Create a higher degree of strategic flexibility
10. Define corporate governance. (Chapter 1) - 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
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