Preview Questions Treasury Manager | Role Specific Skill

Question 1: When managing foreign exchange risk, which of the following strategies would be most effective for a multinational company?

Which action should you take?

Choose only one option

Diversifying in assets denominated in the local currency

Reducing exposure to international markets

Investing in low-risk government bonds

Hedging with forward contracts

Question 2: How does the duration of a bond portfolio affect its risk profile during interest rate changes?

Which action should you take?

Choose only one option

Longer duration reduces interest rate risk

Duration does not affect the risk of a bond portfolio

Shorter duration increases sensitivity to interest rate changes

Longer duration increases sensitivity to interest rate changes

Question 3: How should a Treasury Manager address capital management when there is a sudden liquidity shortfall in the market?

Which action should you take?

Choose only one option

By extending repayment periods to existing customers

By tightening credit policies and reducing loan origination

By raising capital through equity or debt issuance

By reducing dividends and increasing short-term borrowing

Question 4: How should Treasury Managers approach managing a company's excess liquidity?

Which action should you take?

Choose only one option

It should be used to pay down long-term debt immediately

It should be held in cash to avoid any investment risks

Excess liquidity should be invested in short-term, low-risk instruments to generate returns

It should be distributed as dividends to shareholders

Question 5: In cash flow forecasting, what is the primary purpose of the direct method?

Which action should you take?

Choose only one option

To estimate cash flow using indirect accounting methods

To determine the effect of capital expenditures on cash

To evaluate the impact of market trends on liquidity

To calculate cash inflows and outflows directly from operational data

Question 6: When managing liquidity, what is the most important consideration for a Treasury Manager when choosing between short-term and long-term investments?

Which action should you take?

Choose only one option

The alignment of investment maturity with projected liquidity needs

The potential return on investment

The impact of market interest rates on investment value

The risk profile of the investment