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NEW QUESTION 189
At the time of the initial debt contract, the only way debt holders can protect their interests effectively is to establish certain provisions or covenants designed to:
- A. give debt holders a guarantee of full principal payment in the event of default.
- B. reduce issuer refinancing options that could result in their bonds being called.
- C. eliminate all events that could result in a default.
- D. make it difficult for management to engage in actions that reduce the bond's value.
Answer: D
NEW QUESTION 190
Which of the following is an example of a passive investment strategy?
- A. Riding the yield curve
- B. Purchasing an interest rate swap
- C. Utilizing a dividend capture program
- D. Investing in overnight repurchase agreements
Answer: D
NEW QUESTION 191
A United States corporation purchases finished products from a German subsidiary and sells raw materials to the subsidiary several times in one month. To minimize foreign exchange transaction costs, the U.S. corporation's cash manager would MOST LIKELY use:
- A. pooling.
- B. forward options.
- C. multilateral netting.
- D. bilateral netting.
Answer: D
NEW QUESTION 192
A U.S. bank regularly transmits international payments to European based XYZ Bank. The payments flow through an intermediary bank. Recently regulators audited the intermediary bank and discovered the bank may be unknowingly facilitating illegal activities. What payment method was MOST LIKELY used?
- A. Semi repetitive wires
- B. Cover payments
- C. Drawdown wires
- D. CHIPS payments
Answer: B
NEW QUESTION 193
When investing in commercial paper, the investor's primary consideration should be which of the following?
- A. Method of settlement
- B. Dealer used
- C. Interest rate risk
- D. Issuer's credit rating
Answer: D
NEW QUESTION 194
A comprehensive payables service can do all of the following EXCEPT:
- A. concentrate lockbox deposits.
- B. send checks to a vendor.
- C. wire funds to a bank.
- D. set up ACH transfers.
Answer: A
NEW QUESTION 195
The time between receipt of a mailed payment and the deposit of the payment in the payee's account is known as:
- A. processing float.
- B. mail float.
- C. availability float.
- D. collection float.
Answer: A
NEW QUESTION 196
An increasing number of multinational companies have adopted formal multilateral netting systems for which of the following reasons?
- A. To standardize payment routes and banking channels
- B. To facilitate management of foreign exchange exposure
- C. To eliminate duplicate payments to vendors
- D. To improve check clearing times
Answer: B
NEW QUESTION 197
A company is experiencing the following long-term trend on a month-over-month basis: With all other income, expenses, long-term assets and liabilities remaining stable, this trend would MOST LIKELY prompt what action by the company?
- A. Factoring accounts receivable
- B. Financing working capital requirements
- C. Reducing labor costs
- D. Repaying short-term debt
Answer: D
NEW QUESTION 198
The delay between the time a check is deposited and the time the company's account is credited with collected funds is known as:
- A. processing float.
- B. availability float.
- C. mail float.
- D. collection float.
Answer: B
NEW QUESTION 199
Which of the following are KEY issues to be considered when establishing a shared service center (SSC)?
I) Selecting the location
II) Comparing an SSC structure to outsourcing of a process
III) Choosing and implementing the technology for SSC
IV) Choosing the collection bank
- A. II and IV only
- B. I and III only
- C. I, II, and III only
- D. II, III, and IV only
Answer: C
NEW QUESTION 200
A shareholder right found in many corporate charters is the preemptive right which provides:
- A. the right to prevent the company from setting certain board agenda items.
- B. the right of shareholders to choose the corporation's auditor.
- C. the right to choose directors through cumulative voting.
- D. the right to purchase shares of new stock and maintain pro-rata ownership interest.
Answer: D
NEW QUESTION 201
Major Manufacturing Inc. (MMI) is a manufacturer of customized restaurant equipment. MMI's supplier relations policy is to take advantage of trade discounts, when available. All suppliers offer payment terms of 1/10, net 30. MMI invoices customers at the end of its 30-day manufacturing cycle. Which of the following is the correct chronological sequence of the events listed?
1.Customer invoice is sent.
2.Supplier payment is sent.
3.Customer payment is received.
4.Order is shipped.
5.Customer order is received.
6.Supplier order is placed.
- A. 5, 6, 2, 4, 1, 3
- B. 6, 5, 4, 2, 1, 3
- C. 5, 6, 4, 2, 3, 1
- D. 6, 5, 2, 4, 3, 1
Answer: A
NEW QUESTION 202
Each of the following statements is true of both defined benefit plans and defined contribution plans EXCEPT:
- A. both can be classified as overfunded or underfunded depending on the value of plan assets.
- B. the treasurer is normally responsible for overseeing the performance of the plan fund managers.
- C. the Pension Protection Act of 2006 includes significant changes to the rules governing both types of plans.
- D. both of the plans are typically structured as single-employer plans and maintained for employees.
Answer: A
NEW QUESTION 203
Liquidity reserves for opportunistic requirements are typically maintained in the form of:
- A. short-term borrowing facilities.
- B. long-term investments.
- C. working capital.
- D. short-term investments.
Answer: D
NEW QUESTION 204
Which of the following is LEAST likely to appear on an account analysis?
- A. Earnings allowance rate
- B. Money market rate
- C. Service charges
- D. Average float balance
Answer: B
NEW QUESTION 205
A merchant has a chargeback rate of 0.03% on average daily sales of $200,000. After switching to a new merchant acquirer that is a bank, the merchant sees the rate increase to 0.05% or $10,000. The merchant's analysis reveals that the bank maintains its data warehouse in another country where the system network is routinely hacked. What act or standard is being violated?
- A. Bank Secrecy Act
- B. Money Laundering Control Act
- C. Foreign Corrupt Practices Act
- D. Payment Card Industry Data Security Standard
Answer: D
NEW QUESTION 206
Which of the following statements is true about futures contracts?
- A. Their losses are limited to the initial investment divided by the margin requirement.
- B. They can be created for any asset over any period of time and for any amount.
- C. They are marked-to-market on a daily basis.
- D. Their margin requirements are normally 50%.
Answer: C
NEW QUESTION 207
Which of the following is an example of a company's internal data used for cash management?
- A. Returned deposited items
- B. Investment schedules
- C. Incoming wire transfers
- D. Money market rates
Answer: B
NEW QUESTION 208
LST Company is a publicly traded company with $120 million in sales. Historically, LST does not extend credit to customers beyond net 45 terms. To help promote sale of a new product introduced into the market this year, LST offered financing terms to customers purchasing the new product. As a result, sales increased by 15% from the prior year and accounts receivable increased by 5%. At the end of their fiscal year LST had a $15 million sale to a new customer that was recorded as a note receivable. LST recognizes revenue when goods leave the facility. During the financial audit the auditors discovered that the customer did not receive the product until three days after the year-end. Under GAAP accounting, the auditors would MOST LIKELY render a(n):
- A. adverse opinion because the product not received before the fiscal year-end.
- B. disclaimed opinion because the product was shipped before the fiscal year-end.
- C. qualified opinion because the product was not received before the fiscal year-end.
- D. unqualified opinion because the product was shipped before the fiscal year-end.
Answer: D
NEW QUESTION 209
Treasury management systems help cash managers do which of the following?
I. Reduce borrowing expenses
II. Initiate transfers
III. Determine cash position
IV.
Obtain account balances
- A. I, II, III, and IV
- B. I and IV
- C. II and III
- D. I, III, and IV
Answer: A
NEW QUESTION 210
ACCOUNTS RECEIVABLE AT THE END OF MARCH
On the basis of the accounts receivable balance pattern above and April sales of $600, the cash flow forecast for April is:
- A. $715.
- B. $875.
- C. $925.
- D. $440.
Answer: D
NEW QUESTION 211
Future treasury operations will be affected MOST significantly by consolidation of which of the following?
- A. Competitors
- B. Commercial banking industry
- C. Subsidiaries
- D. Procurement cards
Answer: B
NEW QUESTION 212
When projecting the closing cash position, a cash manager must estimate which of the following?
- A. Clearings on non-controlled disbursement accounts
- B. ACH credits
- C. Checks in the process of collection
- D. Lockbox receipts
Answer: A
NEW QUESTION 213
U.S. dollar-denominated instruments issued by foreign banks through their domestic branches are known as:
- A. Eurodollar CDs.
- B. Eurocommercial paper.
- C. Yankee CDs.
- D. banker's acceptances.
Answer: A
NEW QUESTION 214
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