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lOMoARcPSD|39537786FIN3703-Solution to MCQ
Financial Management (University of South Africa)
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, lOMoARcPSD|39537786
QUESTION 1
Treasury management is executed in any business, irrespective of its size, structure
or industry. Which one of the following statements does NOT apply in the definition of
corporate treasury management?
a. Management of cash, liquidity, and risk exposure.
b. Management of foreign currency and cash flow.
c. Setting strategic organisational goals and objectives.
d. Management of cash surplus and cash deficit.
The correct answer is C
Treasury management is defined as management of cash flow (cash surplus and
deficit), liquidity, risk exposure and foreign currencies according to the treasury
policies and guidelines stipulated by the board of directors. Setting strategic
organisational goals and objectives are the responsibilities of the company executives
such as the board of directors and the CEO. Treasury mandate is to implement the
stipulated strategies, objectives and goals outlined in treasury policy by the board of
directors. All students were awarded a free mark for this question.
QUESTION 2
The key activities of treasury management include all of the following, EXCEPT …
a. collection of cash.
b. investment of cash deficit.
c. disbursement of cash.
d. profit and price determination
A. a b
B. b d
C. a c d
D. a b c
The correct option is B because they do not refers to the definition of treasury
managment .
The answer to this question is also obtained or clarified in the definition of
treasumanagement in question 1. Profit determination executed at the cost center
(accounting department) and the marketing strive to position the product at the
appropriate price. This means that option D , or that statement is not prescilely the
part of activities exercised in treasury. Option B is incorrect because cash deficit is
financed through various lines of credits facilities, is not invested as the statement
indicates.
Downloaded by Charlie Masemola (phahlana4@gmail.com)
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