Preview Questions Treasury Manager | Role Specific Skill

Question 1: What is the key purpose of maintaining a liquidity buffer in treasury management?

Which action should you take?

Choose only one option

To reduce the need for short-term borrowing

To ensure that the company has enough cash or liquid assets to meet obligations during periods of financial stress

To pay off long-term debt obligations in advance

To maximize profitability by investing excess liquidity in high-return assets

Question 2: In the context of risk mitigation, which of the following derivative instruments is most commonly used to hedge against foreign exchange risk?

Which action should you take?

Choose only one option

Currency forwards

Equity options

Commodity futures

Credit default swaps

Question 3: What is the role of stress testing in the liquidity management process?

Which action should you take?

Choose only one option

To assess the bank's compliance with regulatory capital ratios

To determine the optimal capital structure of the bank

To calculate the expected return on Treasury investments

To simulate adverse scenarios and evaluate the bank's ability to meet liquidity requirements

Question 4: What is the role of cash flow forecasting in managing a company's financial strategy?

Which action should you take?

Choose only one option

To predict the company's ability to meet short-term obligations

To project long-term capital structure and profitability

To estimate the company's future debt requirements

To ensure the company can manage its working capital needs

Question 5: What is the primary objective of asset-liability management (ALM) in a financial institution?

Which action should you take?

Choose only one option

Ensuring long-term solvency

Minimizing liquidity risk

Maximizing shareholder returns

Optimizing capital structure

Question 6: In portfolio management, what is the difference between systematic risk and unsystematic risk?

Which action should you take?

Choose only one option

Unsystematic risk is broader and applies to market-wide events

Systematic risk can be avoided through diversification

Systematic risk affects the entire market, while unsystematic risk affects individual securities

Systematic risk is specific to bonds, while unsystematic is specific to stocks