Treasury uses all of the following types of internal information EXCEPT:

A multinational corporation (MNC) moving all of its Mexican peso-denominated revenues into a lower tax-rate jurisdiction could adopt any of the following treasury practices EXCEPT:

A large retailer is preparing to accept credit cards and anticipates monthly credit card sales of $1,000,000. If the terms with the acquiring bank include bundled allocated fees of 6% and the retailer wishes to delay fee payment as long as possible, what should the retailer do?

A small regional bank is losing market share in fiduciary services and the CEO has decided to scale back the trust department. Which of the following is considered a core service of a trust department?

All of the following are examples of treasury management system transactions for liquidity management EXCEPT:

A company is concerned that investor dissatisfaction could lead to a rapid change in its board membership. To prevent this, which of the following strategies should the company employ?

The auditors of a private college are examining and auditing the college’s financial statements. The statements are not presented in accordance with GAAP. What should the auditors do?

As a result of the Sarbanes-Oxley Act, what new entity was established to sanction firms and individuals for audit violations?

Disbursement float includes which of the following three float time intervals?

A company is interested in lowering its overall banking costs, managing netting, pooling, re-invoicing, and centralizing FX exposure at headquarters. Which of the following options will accomplish this?

A large, nation-wide, retailer of plumbing fixtures is considering implementing ACH technology to improve its accounts receivable processing. Which of the following pre-authorized ACH transactions can the company use for this application?

A multinational company may use which of the following to locate profits in subsidiaries in low-tax countries?

A company plans to issue additional equity within the next 12 months but needs to issue debt at a low interest rate now. Which of the following instruments would BEST meet this objective?

The Governmental Accounting Standards Board (GASB) is the authoritative standard-setting body for which of the following?

Company XYZ is now required to make electronic payments by its suppliers. To prevent an increase in costs, the company shoulD.

The discount rate for a T-bill with a face value of $200,000, 182 days to maturity, and a selling price of $194,375 would be:

On a company’s financial statements, an increase in accounts receivable is reflected as a(n):

A company wishes to monitor and control office expenses incurred by its employees. Which of the following offers the BEST method of providing the employees freedom to choose different vendors while maximizing spending control?

MICR encoding errors may be detected by all of the following TMS modules EXCEPT:

Under the strict cash basis of accounting, revenue is recorded when:

Which of the following statements are true about the use of different discount rates for different types of projects?

I. Low-risk, short-term projects may be evaluated by using a short-term opportunity cost.

II. High-risk projects may be evaluated by using a discount rate that is greater than the company's normal opportunity cost.

III. A short-term investment (or borrowing) rate may be used as the company's short-term discount rate.

IV. The use of a lower discount rate for riskier projects forces riskier projects to earn higher rates of return.

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?

The PRIMARY difference between defined benefit and defined contribution pension plans is whether the employee or the employer:

When a paper check is converted to an electronic form:

Which cost benefit analysis technique uses the methodology to find where the present value of each project’s cash inflows equals the present value of each project’s outflows?

Controlled disbursement notification times can be improved by which of the following?

Operational risk is defined as the risk of direct or indirect losses resulting from external events or failure of internal resources. As treasury departments maintain legacy systems that must be integrated into more complex technology, one would expect that:

Company A has operated a Pension Plan since 1985. Despite a recent surge in asset values, the plan remains significantly underfunded. With the passage of the Pension Protection Act of 2006, Company A will be need to:

What type of insurance provides payments to an organization if it is unable to continue operations for some period due to an unforeseen event?

According to the Capital Asset Pricing Model, which of the following would increase the required rate of return, given a beta of 1?

Company A anticipates the following cash inflows and outflows for the next three months:

If the company's treasurer is preparing a cash-flow projection for Month 2, and he is focusing purely on items that can be projected with a fair degree of certainty, what will the net projection be?

QRT Corporation uses exponential smoothing in its cash flow forecasting model. Five days are used to calculate the moving average forecast.

If the value of the smoothing constant is .60, what is the exponential smoothing forecast for day 7?

XYZ Company is interested in issuing a bond to finance a new venture opportunity. The new venture is not expected to generate any cash flow for several years. Because of this, XYZ Company would prefer to issue a bond that does not require interest payments. What type of bond should XYZ Company issue?

RAL Industries is a manufacturing company that currently has locations in the United States and Latin America and has just completed an acquisition of a company located in Europe. As a result of the acquisition, they have a large number of financial service providers. In an effort to reduce the number of providers and services used globally, RAL has decided to develop a formal selection process to consolidate its many global banking services. In order to reduce the amount of time the selection process takes, determine which services providers can offer, and the number of providers involved in the process, what should RAL Industries issue?

XYZ Holdco has multiple credit facilities with a bank under a borrowing agreement that includes certain covenants. A fire has destroyed the manufacturing plant owned by ABC, one of the XYZ subsidiaries that is part of the credit facilities. All loans, including the ABC loan, are up to date and being repaid as required. However, after the fire, the bank notified XYZ that it was in default. Which one of the following covenants is MOST LIKELY a term of the borrowing agreement?

Based on the following information, how much money will XYZ Company owe the bank for monthly service charges after the earnings credit is applied?

Average Ledger Balance $500,000

Deposit Float$10,000

Reserve Requirement10%

Earnings Credit Rate5%

Monthly Service Charges$5,000

Days in month30

Company XYZ is a high technology company. It is planning on acquiring another company in the high technology sector. Company XYZ does not have enough cash to acquire the company and is planning on financing the acquisition through a bond offering. Which of the following measures is company XYZ MOST LIKELY to use in its analysis of operating profits considering it is a high debt transaction?

A company invests in a bond and then later agrees to sell the bond to a bank with the understanding that the company will buy the bond back at a later time. This is known as:

Which of the following prohibits price discrimination among customers where cost differences do NOT exist?

An electronics firm realizes that due to adverse events projected over the next 18 months there is a 5% chance that its profits will decrease by $100,000. The company's beta is .08 and its cost of capital is 9%. What approach is the company MOST LIKELY using to determine its level of financial risk?

A company in a distressed financial condition may choose to use which of the following services to entice suppliers to continue to sell to it on open terms?

A company has selected a specific project for investment. If the weighted average cost of capital (WACC) used to evaluate the project results in a negative net present value (NPV), which of the following will occur?

The term "collection float" is defined as the delay between the time the payor:

A cash manager should use which of the following techniques to measure the differences among cash flows with different timings and amounts?

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 convenience store chain would typically use which of the following types of collection systems?

A retail lockbox system is characterized by which of the following?

I. An emphasis on processing cost

II. Detailed information on discounts taken

III. Small-dollar amounts per invoice

IV. Multiple invoices per payment

All of the following statements are true about loan participations EXCEPT:

A KEY feature of municipal bonds is that they are:

True statements about the open account method of trade payment include which of the following?

I. A bank guarantees payment.

II. It is the most common type of trade credit.

III. A periodic credit review of each customer is required.

IV. The customer makes equal monthly payments.

The credit risk in the settlement of a Fedwire is borne by the:

A cash manager invests in Treasury bills for which of the following reasons?

A company uses a dividend capture strategy to:

Which of the following can be considered key responsibilities of daily cash management?

I. Overseeing compensation for bank services

II. Management of short-term borrowing and investing

III. Projecting future cash shortages and surpluses

The time from the deposit of a check in a bank account until the funds can be used by the payee is known as:

Which of the following investment instruments is a discount instrument?

All of the following are differences between Fedwire and ACH EXCEPT:

Which of the following are commonly used for financing accounts receivable?

I. Factoring

II. Issuing credit cards

III. Revolving bank loans

IV. Letters of credit

A company sells products to customers on credit, generating accounts receivable. The company uses the accrual accounting method. Once the company collects good funds from its customers, what is the impact on the financial statements of the company?

With respect to the Sarbanes-Oxley Act, a company may avoid additional reporting requirements by:

A company transmits a payment file of ACH and Fedwire vendor payments to its financial institution to execute. Which article of the Uniform Commercial Code governs these payments?

A Chicago meat processor is concerned about the volatility of pork belly prices. Which of the following derivative products would be used to fix these prices within a given range?

Optimal dividend policy is one that does all of the following EXCEPT:

Company A is a large public company with annual revenue of $1.2 billion and high fixed costs. Its stock is listed on the New York Stock Exchange. Company B is a mid-sized company with annual revenue of $100 million and low fixed costs. Its stock is listed on the NASDAQ. Which of the following statements is MOST LIKELY to be true when comparing Company A and Company B?

Netting is used by which of the following as a cross-border payment technique?

A public corporation may value a defined contribution plan highly because it:

In which of the following instances does the clientele effect come into play?

A distribution business has used several bank loans to finance its expansion plans. After a fire destroyed the company’s facility and inventory, it went out of business due to the loss of revenue during the month it was closed. What type of insurance coverage should the company have had to prevent its demise?

Company XYZ is not sure which direction interest rates are headed. Which of the following would be MOST suitable?

An instrument that gives the right to buy a stated number of shares of common stock at a specified price is known as:

A large mature company with limited growth opportunities (positive NPV projects) achieved abnormally high profits this year. After paying mandatory principal, interest, and taxes, the company has $200 million in surplus cash on hand. Assuming its investor base is most concerned with capital appreciation, which of the following is the BEST option for the company?

A customer buys a laptop for $850 and a CD for $13. Only items with sale price of $15 and greater are subject to value added tax (VAT). Assuming VAT of 8.5%, how much tax does the customer incur at the point of sale?

The Treasurer of a company would like to establish an investment policy for the organization. One objective that should be included in the investment policy that would BEST allow the organization to limit its exposure to a particular market sector would be to:

While revising the investment policy, the CFO performs a sensitivity analysis for the company’s cash flow from investments, and identifies that increasing the maximum dollar value for bond purchases will improve returns by 10% on average, all other variables being equal. What issue will the CFO now need to address in the investment policy?

The regional offices of ABC Company implemented a system that would allow the employees to pass information between regions in a secure fashion. This system requires that all offices have the same key in order to read messages sent electronically. Which e-commence security type is MOST LIKELY being used?

Company A has decided to purchase $3,000,000 of real estate from Company B. Company A will make the payment in 3 parts. The electronic payments will be sent from Bank A to Bank B. On Day 1 Company A will send a $400,000 check as a deposit, which is deductible from the balance. The check is expected to clear in 4 days. On Day 2, two payments are initiated, one wire transfer for $2,000,000 and an ACH for $600,000 to complete the balance. On Day 2 what percentage of the payment to Company B is NOT final?

MCA, Inc. upgraded the Treasury workstation that had been in place for two years and used data from that 24-month period to develop a new short-term forecast. A trend factor was applied to controlled disbursements of 97% on a month-by-month basis and the variance to actual disbursements is less than 1%. Which of the following model validation techniques was utilized?

An art history museum has recently finished renovating its new location. Before the move, the treasurer considers purchasing additional insurance to protect the art during transit. What form of additional insurance should the treasurer choose?

West Coast Retail Shop has experienced reduced cash availability in its bank account since a new store manager was hired. The manager is responsible for manually preparing daily bank deposits, which generally include a large number of checks, for processing at a bank branch in the same shopping mall as the store. Which of the following should West Coast Retail Shop implement to improve the available balance in its bank account?

An analyst at XYZ United is in charge of setting up the bank accounts. Fraud is a major concern due to the analyst’s past experience with previous employers. The analyst has estimated that the company will earn 3.7% on surplus cash. Surplus cash must be invested in short-term investment grade investments. The company’s closest competitor earned 4.1% for its surplus cash in its latest fiscal year. What bank service should the analyst use to maximize the company's surplus cash?

On June 1, a manufacturing company experienced a system failure that lasted more than 24 hours. The company did not have any contingency plans in place and as a result the cash manager was unable to process the following payments: $25,000 to the p-card issuer, $125,000 for weekly payroll, $500,000 for a bond interest payment, $260,000 for the weekly vendor payments and $50,000 for the monthly utilities. The receivables were deposited at the bank; however, the cash manager does not have a way to confirm the amounts. The suppliers are threatening to stop shipments due to the delay in payment and the loss of supplier shipments threatens the company’s just-in-time production. What did the manufacturing company trigger as a result of the system failure?

When a company announces a significant and unexpected dividend increase, it signals to the market that management expects:

A bank is evaluating the credit risk for a company seeking to optimize costs and originate a high volume of outgoing ACH payments. What is the BEST provision the bank should establish to control its credit exposure?

A company is filing for bankruptcy protection and is concerned about the welfare of its sizeable retiree population. Under ERISA, it is obligated to perform which of the following actions regarding its defined benefit plan?

A company with $50 million in foreign assets decides to increase its foreign debt by $40 million for a debt ratio of 80%. This action will reduce which exposure?

XYZ Inc. has limited cash flow, total liabilities to total assets greater than 52%, and a high WACC. To help meet the goal of lowering their WACC, the company plans to issue several million dollars of private equity to the chairman of the board. If the company proceeds with this plan, the company may:

ABC Company, a leading provider of office supplies, has successfully implemented EDI based on a request from one of its customers. ABC will not only benefit from the strategic alliance that will result, but as more of ABC’s customers adopt the program, ABC will also experience a positive impact on its:

Which of the following is the appropriate strategy to use for an active portfolio manager who is faced with an upward sloping yield curve?

Improvements to the cash flow timeline from a selling company’s perspective would include:

A multidivisional domestic company with centralized treasury decision-making can potentially utilize intra-company lending to:

If a company does not have cash available to make an interest payment on a bond, the company is experiencing difficulty with its:

When a company creates future receivables and/or payables that are denominated in a currency other than its home or functional currency it is faced with:

ABC Company has recently moved away from paper-based invoicing systems and has begun implementing e-commerce solutions. Realizing that its e-commerce implementation may have a negative impact on the float of its trading partners, ABC can do which of the following to help address this concern?

When a foreign subsidiary pays a dividend to its parent company the transfer of funds may be subject to:

All of the following are typical uses of a zero balance account EXCEPT:

A small group of investors is purchasing a company using a large amount of debt. This group is intending to sell off pieces of the acquired company to other firms that it believes can take advantage of potential synergies. What is this type of a transaction more specifically known as?

Evaluating the liquidity needs of an organization is a function of:

Which of the following is a regulation that is having a major impact on the treasury profession?

In this situation, the net earnings credit amount for the month would show:

A multinational company that uses “notional pooling” for its euro zone subsidiaries will realize which of the following advantages?

To arrive at today’s projected closing cash position, a cash manager starts with:

Which of the following techniques would MOST accurately predict a company's daily cash position?

Which currency will sell at the greatest discount in the forward market against the U.S. dollar?

In predicting collections from credit sales, a cash manager can obtain prior period information from which of the following sources?

I. Customer payment histories

II. The company's concentration bank

III. The accounts receivable department

IV. The accounts payable department

A company has large, ongoing short-term financing requirements with a maximum horizon of 250 days. It has a good credit rating and would like to use the least expensive source of short-term debt to finance its needs. The Treasurer might recommend which of the following?

A U.S.-based electronics company that buys components from one of its foreign subsidiaries at a price above market is likely to:

To strengthen outside auditor independence with regard to publicly held companies, the Sarbanes-Oxley Act requires that:

A U.S. bank is actively trying to establish its operations in an emerging market country, but is not experiencing much success due to differences in the business culture. To gain some market share, an executive of the bank decides to give the son of a local dignitary a highly paid position in the organization. Furthermore, the dignitary is a person of interest on various terror watch lists. Sanctions can be placed on the bank because the executive did NOT establish compliance with which of the following?

The Treasury Analyst at an investment firm has entered the company into a repurchase agreement with a counterparty at the direction of the Treasury Manager. The compliance office has determined that the trade was done in violation of the company investment policy. The Treasury Manager has the power to approve the execution of trades; however, the Treasury Analyst was not a designated trader on behalf of the firm. Which area of the investment policy was violated by the Treasury Analyst?

In a partial reconciliation, a bank provides a company with which of the following?

Which of the following is an advantage of a centralized treasury function?

Which of the following is an example of a typical passive investment strategy?

Company A purchases materials on cash-before-delivery terms, while Company B uses paid-on-production terms. Both companies are diligent with the protection of assets, but Company B has concerns with respect to transfer of title of the materials. Company B is MOST LIKELY what type of business?

A financially sound company sends wires to investors in the morning but does not receive replacement funds until the afternoon. Which facility will the company MOST LIKELY arrange with its bank to facilitate the company’s wire payment activities on any given day?

An international organization has decided to move its treasury operations to the head office in Paris, France. The company’s goal is to establish the treasury as the primary provider of banking services and all company financing. What would the new proposal be an example of?

Which of the following payment instruments can provide predictable collection float?

I. Wire transfer

II. Check

III. ACH

IV. Cash

Investors typically require a higher yield as compensation for holding securities that have:

What is the Weighted Average Cost of Capital for XYZ Company, assuming the following:

• The pre-tax cost of long term debt is 8%
• The cost of equity is 11%
• The marginal tax rate is 33%
• Total liabilities = $75,000
• Long term debt = $50,000
• Owners equity = $75,000

What step can a cash manager take to validate a cash flow forecast?

A diversified industrial company operates multiple remote manufacturing facilities that manage local supplier relationships. The company draws on a single line of credit for all of its working capital needs. Which of the following types of disbursement systems would BEST meet this company's needs?

A company has asked its marketing, payroll and sales teams to collaborate in finding a solution that could augment its customer base, reduce payroll cost and increase sales. The solution has to be market ready. Which of the following will serve all 3 purposes?

All of the following are common consumer-to-corporate international payment mechanisms EXCEPT:

Which of the following business practices does NOT comply with the Uniform Commercial Code?

Which of the following is a typical overnight use of excess cash?

If a company uses accrual accounting, deferred taxes are reported on which financial statement?

All of the following are advantages of using traditional financial ratios for analysis EXCEPT:

Which of the following types of payments would NOT be included in cash flow forecasting?

An international company would establish a re-invoicing center for which of the following reasons?

Merchant XYZ has total credit card sales of $20,000 for one day with an average ticket of $200. The merchant’s interchange reimbursement fees are 2% and transactions fees are $0.05. This merchant receives net settlement. Which of the following is the value of the deposit for that day?

Examples of fixed assets include which of the following?

I. Inventory

II. Treasury bills

III. Forklift

IV. Goodwill

Financial risk management requires monitoring changes in which of the following?

I. Interest rates

II. Foreign exchange rates

III. Commodity prices

IV. Cost of insurance

In most countries other than the United States, which of the following is used to compensate banks for services provided?

A company purchases a machine tool with an expected life of 3 years. Under the accrual accounting method, the equipment would be treated in which of the following ways?

Which report is MOST LIKELY to be a current-day information report?

Under Section 404 of the Sarbanes-Oxley Act, management must state its responsibility for which of the following?

When using the Internet to access auction markets, companies may use certificate authorities to reduce their exposure to which of the following types of risk?

Establishing the authority to open bank accounts is the responsibility of:

A treasurer has been advised that his privately held company has just lost its largest customer, which will have a significant impact on earnings. The treasurer applies an aggressive working capital strategy. Presently, the yield curve is upward sloping. Given this information, the treasurer should ensure that the company has:

As an internal control tool, what does the matching of an invoice to the original purchase confirm?