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NEW QUESTION 414
Which of the following is NOT a consideration for treasury managers when implementing electronic communications with FSPs?
- A. Telecommunications infrastructure
- B. Physical location of FSP
- C. Cost limitations
- D. Security concerns
Answer: B
NEW QUESTION 415
Which of the following statements BEST applies when evaluating fees in an RFP for bank services?
- A. A proforma account analysis statement captures all pricing and compensation detail.
- B. Accurate evaluation and comparison of the proforma account analysis statements are critical.
- C. Flexible credit terms are the most important consideration.
- D. Ability of financial institution to customize services is critical.
Answer: B
NEW QUESTION 416
A bank issues a letter of credit (L/C) and receives a request for payment under the L/C. The buyer notifies the issuing bank not to make payment because there is a dispute over the quality of the merchandise. However, the documents received fully comply with the terms of the L/C. Which of the following statements is true?
- A. The bank may delay payment until reimbursed by the buyer.
- B. The bank must make payment and is entitled to immediate reimbursement from the buyer.
- C. The bank may delay payment, provided the seller is notified of the dispute within three business days.
- D. The buyer may immediately return the merchandise and cancel the L/C.
Answer: B
NEW QUESTION 417
Some treasury management systems are capable of initiating investment purchases and loan drawdowns automatically. The automating of these transactions is related to which of the following treasury management functions?
- A. Payment management
- B. Liquidity management
- C. International trade management
- D. Capital budget management
Answer: B
NEW QUESTION 418
On the basis of the following exchange rates,
which of the following currency amounts has the greatest value in U.S. dollars?
- A. EUR900,000
- B. JPY5,000,000
- C. GBP850,000
- D. C$750,000
Answer: C
NEW QUESTION 419
Which of the following is true about using an RFI in the financial institution and FSP selection process?
- A. A response to an RFI is a formal commitment for services.
- B. RFI is a formal document that outlines objectives, needs and service requirements.
- C. An RFI can speed up the review process.
- D. A response to an RFI is a binding agreement.
Answer: C
NEW QUESTION 420
Which two of the following are optimal uses for short-term excess cash?
I. Pay down credit lines.
II. Make overnight investments.
III. Repurchase stock.
IV.
Make capital expenditures.
- A. I and II
- B. II and IV
- C. I and III
- D. II and III
Answer: A
NEW QUESTION 421
Which statement is true about credit unions?
- A. Their deposits are insured by the FDI
- B. They are not-for-profit organizations.
- C. They offer lending rates similar to other financial institutions.
- D. They can only be chartered by state agencies.
Answer: B
NEW QUESTION 422
A company's basic investment objectives should include all of the following EXCEPT:
- A. maximizing exposure.
- B. minimizing risk.
- C. optimizing returns.
- D. ensuring liquidity.
Answer: A
NEW QUESTION 423
Trade terms are renegotiated under e-commerce in order to:
- A. balance the payment.
- B. quantify the savings.
- C. neutralize the float.
- D. improve the seller's availability.
Answer: C
NEW QUESTION 424
The historic rate of return in the U.S. stock market is 8%. An investment portfolio has a mix of equity investments consisting of 40% A-Corp stock, 30% K-Corp stock, 10% M-Corp stock and 20% W-Corp stock. The investment portfolio manager tends to buy and hold the equity investment position for 3 years on average. To calculate the required rate of return for this investment portfolio, what rate from the table would be used as the risk-free rate?
- A. 4.50%
- B. 0.10%
- C. 3.30%
- D. 0.75%
Answer: B
NEW QUESTION 425
What is the MOST appropriate rate used as the discount rate in calculating NPV?
- A. Internal transfer rate
- B. IRR
- C. Marginal cost of capital
- D. Cost of debt
Answer: C
NEW QUESTION 426
A company's Chief Financial Officer assigns a team reporting to the Treasurer to restructure the company's complex debt instruments and equipment leasing arrangements. The team executes the required settlement transactions using wire payments to facilitate the new debt structure, and in the process violates the lending requirements of the company's bank. What should the Treasurer have done to prevent the violation?
- A. Set up an exception management process.
- B. Established covenant monitoring and compliance controls.
- C. Restricted access to the company's payment processing system.
- D. Segregated the team's duties for the debt structuring and transaction activities.
Answer: B
NEW QUESTION 427
The USA Patriot Act has added significant amounts of overhead to financial transaction processing organizations to prevent money laundering. If an organization does NOT comply with the terms of this act, what external risk is it exposed to?
- A. Fraud/theft
- B. Procedure/policy
- C. Financial/budgetary
- D. Legal/regulatory
Answer: D
NEW QUESTION 428
Three college roommates open a fast-food restaurant chain after graduation. They decide to offer a 401(k) plan to all of their 700+ employees and a defined benefit retirement plan for themselves and their six Group Vice Presidents. If the company initially funds the defined benefit plan with $10 million and is in the 32% tax bracket, what is the after-tax cost of the funding?
- A. $13.2 million
- B. $10.0 million
- C. $3.2 million
- D. $6.8 million
Answer: B
NEW QUESTION 429
A small import/export company, XYZ Company, has recently set up an account with a German firm. The contract between the companies states that XYZ is to be paid as soon as all documents are in order showing that the transaction terms have been met. Which of the following forms of payment drafts would be MOST appropriate for XYZ?
- A. Payable through
- B. Preauthorized
- C. Sight
- D. Time
Answer: C
NEW QUESTION 430
What is the premium (price) for an oil contract, if the following conditions are present?
LIBOR rate of 5% Out of the money cost of $3 Strike price is $4 In the money price of $1 Speculative premium of $2
- A. $3
- B. $7
- C. $7.35
- D. $5.25
Answer: B
NEW QUESTION 431
A manager has prepared an analysis of five investment alternatives. Prior to selecting which alternative to invest funds in, the manager calculated the anticipated return for all options. The manager is only going to invest in one alternative. The four investments that are not chosen are:
- A. an opportunity cost.
- B. a cost of capital.
- C. a loss of leverage.
- D. a cost benefit.
Answer: A
NEW QUESTION 432
Convertible securities consist of preferred stock anD.
- A. common stock.
- B. treasury stock.
- C. bonds.
- D. tracking stock.
Answer: C
NEW QUESTION 433
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