Chapter 1 - TM

The items listed below are some of the major objectives of treasury management. What is another of these objectives? A. Prioritize investments for profit. B. Perform financial planning and analysis. C. Optimize cash resources. D. Set organizational strategy.

C. Optimize cash resources.

The items listed below are some of the primary treasurer responsibilities. What is another of these responsibilities? A. Credit and A/R B. Financial risk management C. Tax management and reporting D. Investor relations

B. Financial risk management

The MOST common way that companies structure their treasury operations is as a(n): A. cost center. B. profit center. C. shared service center. D. in-house bank.

A. cost center.

A main characteristic of a company with regional offices using a centralized treasury function is: A. high level of control. B. increased borrowing costs. C. centrally determined depository accounts. D. increased operating costs.

A. high level of control.

For publicly traded companies on a US stock exchange, who does SOX make personally responsible for financial statement accuracy? A. Treasurer B. Chief financial officer (CFO) C. Controller D. All of the above

B. Chief financial officer (CFO)

EML Inc., which has $600 million in outstanding debt, is preparing to issue commercial paper in excess of $100 million within the next six months. The new assistant treasurer has recently spent time getting to know the issuing and paying agent, the rating agency analyst, and the legal counsel, and has been following the financial markets. What is this is an example of? A. Benchmarking with peers B. External collaboration C. Decentralized control D. Risk transfer

B. External collaboration

Checks and balances with regards to Treasury activities are important because A. Treasurers have a certification that must be upheld B. Treasurers deal with the cash of the company in all aspects C. The auditors will review all treasury activities and ensure ethical behavior D. Ethics are actually not paramount for treasury staff

B. Treasurers deal with the cash of the company in all aspects

In order to be defined as independent, a corporate director: A. cannot have owned preferred stock shares in the company. B. cannot have a material relationship with the company. C. cannot meet regularly with executive management outside of board meetings. D. cannot have been an employee with the company during the past three years.

B. cannot have a material relationship with the company.

When and why is treasury set up as a cost center versus a profit center? A. Cost centers are less common. B. In a profit center, treasury is seen as a support function. C. Cost centers are common in global finance, trade, or risk management. D. Profit center income is from trading and hedging/speculative activities.

D. Profit center income is from trading and hedging/speculative activities.