Preview Questions Treasury Manager | Role Specific Skill

Question 1: How does ASC 820 define fair value in the context of Treasury financial reporting?

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The price that would be received to sell an asset or paid to transfer a liability in an orderly transaction

The value after adjusting for expected future cash flows

The average cost of an asset based on market conditions

The price determined by management for internal reporting

Question 2: What would be the optimal response for a Treasury Manager when there is a sudden and significant reduction in available liquidity?

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Increase investment in equity markets to boost liquidity

Cut back on capital expenditures and employee bonuses

Delay all payments to creditors and suppliers

Raise emergency funding through short-term borrowing or asset liquidation

Question 3: In the context of financial planning, what does a liquidity gap indicate?

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A mismatch between short-term assets and liabilities

A surplus in long-term investments

A decline in the market value of assets

A shift in currency exchange rates

Question 4: Which of the following risk-adjusted performance measures is most appropriate for evaluating the performance of treasury-managed investments?

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Value at Risk (VaR)

Sharpe ratio

Beta coefficient

Alpha coefficient

Question 5: What is the impact of excessive short-term borrowing on liquidity and capital management in a financial institution?

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It improves liquidity without affecting capital

It decreases the overall cost of capital

It may increase liquidity risk and reduce the institution's financial stability

It reduces credit risk exposure

Question 6: In preparing financial plans, which of the following methods is commonly used to estimate future cash flows?

Which action should you take?

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Trend analysis

Discounted cash flow (DCF) analysis

Ratio analysis

Comparative benchmarking