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treasury management.docx...treasury management.docx., Exams of Nursing

University of CambridgeNursing

treasury management.docx...treasury management.docx.

Typology: Exams

2025/2026

Available from 04/21/2026

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treasury management
1. What are the major objectives of treasury management (Chapter 1) - correct
answer Maintain liquidity
Optimize cash resources
Maintain access to short term financing
Manage investments
Maintain access to medium and long term financing
Manage financial risk
Coordinate financial functions and share financial information
Manage external vendors
2. Which of these objectives make up working capital management (Chapter 1) -
correct answer Maintain liquidity
Optimize cash resources
Maintain access to short term financing
Manage investments
3. Why is effective management of working capital critical to an organization
(Chapter 1) - correct answer Working capital management is
the foundation of effective treasury management. Without access to cash to pay
vendors and employees, companies cannot operate. Many profitable companies
have been forces to close their doors because of insufficient liquidity due to poor
cash management.
4. What are the typical responsibilities of a treasurer (Chapter 1) - correct answer
Managing overall financial risk, including FX risk.
Arranging ST and LT external financing
Managing relationships with banks and other service providers
Overseeing day to day liquidity and cash management
Investing for ST and LT
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treasury management

  1. What are the major objectives of treasury management (Chapter 1) - correct answer Maintain liquidity Optimize cash resources Maintain access to short term financing Manage investments Maintain access to medium and long term financing Manage financial risk Coordinate financial functions and share financial information Manage external vendors
  2. Which of these objectives make up working capital management (Chapter 1) - correct answer Maintain liquidity Optimize cash resources Maintain access to short term financing Manage investments
  3. Why is effective management of working capital critical to an organization (Chapter 1) - correct answer Working capital management is the foundation of effective treasury management. Without access to cash to pay vendors and employees, companies cannot operate. Many profitable companies have been forces to close their doors because of insufficient liquidity due to poor cash management.
  4. What are the typical responsibilities of a treasurer (Chapter 1) - correct answer Managing overall financial risk, including FX risk. Arranging ST and LT external financing Managing relationships with banks and other service providers Overseeing day to day liquidity and cash management Investing for ST and LT

Developing and implementing treasury policies and procedures Managing domestic and international payments

  1. What are the typical responsibilities of a credit manager (Chapter 1) - correct answer The credit manager preserves and collects accounts receivable, sets corporate credit policies, approves the extension of credit terms and exposure to limits to customers and establishes information systems to monitor accounts receivables.
  2. What are some typical activities for which a board of directors might grant authority to individuals within treasury organizations (Chapter 1) - correct answer Open close and modify bank accounts Establish credit facilities Oversee investments Issue debt and equity securities Devise implement and execute risk management strategies
  3. What are the 6 tasks involved in daily cash management (Chapter 1) - correct answer Preparing a cash position worksheet Monitoring cash balances on deposit at financial institutions Collecting concentrating and disbursing cash Investing and borrowing funds on a ST basis when needed Researching and reconciling exception items such as unexpected charges on bank accounts missing deposits and uncleared checks Coordinating efforts with other finance areas such as AR AP tax and accounting
  4. What is the downside of making treasury a cost center? (Chapter 1) - correct answer The downside to making treasury a cost center is that management may focus on the cost of treasury operations and not the value provided by the function, leading to difficulties in obtaining appropriate budget and staff
  5. Why are shared services centers (SSCs) typically deployed (Chapter 1) - correct answer Reduce the costs of multiple or duplicate operations
  1. What are the principal committees of the bank for international settlements? (Chapter 2) - correct answer o Group of Governors and Head of Supervision (GHOS) o Committee on Global Financial System (CGFS) o Committee on Payment and Settlement Systems (CPSS)
  2. Describe the main features of the third Basel accords. (Chapter 2) - correct answer o Goals: Improve the banking sectors liability to absorb shocks arising from financial and economic stress, whatever the source Improve risk management and governance Strengthen banks transparency and disclosures o Reforms target: Bank level regulation help raise the resilience of individual banking institutions to periods of stress System wide risks that can build up across the banking sector as well as the procyclical amplification of these risks over time
  3. What is SEPA? (Chapter 2) - correct answer o (Single Euro Payments Area) aimed to make Europe more dynamic and competitive A system that is designed to create financial efficiency for countries using the euro by providing a unified system in which to perform financial transactions. The SEPA seeks to create a better system for credit transfers, an improved debit system and a cheaper way for individuals and firms to make transactions within member countries or regions.
  4. What is the FATF and what does it do? (Chapter 2) - correct answer o ( Financial Action Task Force) (more than 30 countries) The development and promotion of policies aty both a national and international level to combat money laundering and terrorist financing
  5. Describe the 3 stages of money laundering

(Chapter 2) - correct answer 1. PLACEMENT physical deposit of cash proceeds from illegal activities into an FI

  1. LAYERING series of financial transaction designed to separate cash proceeds from their criminal or terrorist origins
  2. INTEGRATION creating what appears to be a legitimate explanation for the source of the funds
  3. What are the 5 general areas in which financial institution regulation is typical concentrated? (Chapter 2) - correct answer o Monitoring and managing the overall safety and soundness of the banking system o Setting and implementing monetary policy o Determining guidelines for the chartering of banks and other depository FIs o Allocating credit toward certain sectors of the economy and protecting consumers o Protecting investors purchasing through FIs
  4. What are the major provisions of the Gramm-leach Bliley act? (Chapter 2) - correct answer o Permits the creation of financial holding companies that can engage in any activity that the fed considers financial in nature or incidental to it o Establishes the fed as the primary regulator of FHCs which are subject to consolidated capital requirements at the parent company level and bank style risk management at all levels. o Allows easier entry for foreign banks into the US fin. Services market o Includes key provision relating to consumer protection including specific relations regarding the protection of nonpublic personal info
  5. What is the Durbin amendment? (Chapter 2) - correct answer o Amendment to the Dodd-Frank Act provision intended to limit debit card interchanges and fees and increase competition in payment processing
  6. What are the main provisions of the USA PATRIOT act? (Chapter 2) - correct answer o Impose significant obligations upon nonbank FIs. It also includes nonfinancial entities potentially handling large value transactions such as car, boat plane and jewelry dealers o Makes all foreign banks with accounts in the US subject to US jurisdiction including the power to obtain records and info regarding customers

Implemented the interest bearing account restriction of the glass steagall act of 1933 and barred the paying of interest on any corporate demand depository accounts o Y It defines and regulates the nonbanking activities in which bank holding companies and foreign banking organizations in the US may engage, including anti-tying restrictions o Z Primary impact of this regulation relates to credit cards offered to their customers; for educational institutions, the impact relates to the use of student loans

  • ( promoting informed use of credit by consumers) o BB Requires banks to help meet the credit needs of the entire community in which they do business o CC Establishes rules designed to speed the collection and return of checks and mandates banks to return unpaid checks expeditiously
  1. What is the uniform commercial code? (Chapter 2) - correct answer o A set of laws governing commercial transaction in the US. It defines the rights and duties of all parties in a commercial transaction and provides a statutory definition of commonly accepted business practices.
  2. What are escheatment statutes and how to they impact bank and companies (Chapter 2) - correct answer o Impact banks or companies that hold unclaimed assets of customers or employees Am entity holds money or property and the property goes unclaimed for some specified period od time
  3. List the most common types of bankruptcies allowed by US fed. Legislation (Chapter 2) - correct answer o Chapter 7: liquidation of a firm o Chapter 9: financially distressed municipalities o Chapter 11: business reorganization o Chapter 13: adjustment of debts for individuals with regular income

o Chapter 15: establishment of bankruptcy trustees

  1. Describe the 3 types of formal bankruptcy (Chapter 2) - correct answer o Freefall A firm goes into bankruptcy and has no structured plan for coming out o Prearranged Management has arranged a tentative deal with some of the creditors or parties but not with all of them, generally these deals are done on an informal basis and are not legally binding o Prepackaged Management files with the SEC a formal plan that all classes of creditors have voted on and accepted. Essentially, the firm goes to court with all the details worked out and with everyone agreeing to the plan
  2. What is a capital tax? (Chapter 2) - correct answer o In some foreign countries, particularly those experiencing an upsurge in economic growth, companies are assessed a capital tax on the initial capital used to establish a new venture, and on subsequent incoming capital or repatriated capital ( fiscal tool used by some countries to augment tax collections
  3. What is a global institution and what are the primary services that it offers? (Chapter 3) - correct answer • One that operates in multiple countries in more than 1 part of the world, providing services to both domestic and multinational corporations
  4. What are the 2 types of depository accounts (Chapter 3) - correct answer • Current > checking or demand deposit accounts
  • Noncurrent or time deposit accounts
  1. What are the different types of credit services offered by commercial banks (Chapter 3) - correct answer • Commercial banks are broad based lenders
  1. What is a bank identification code? (Chapter 3) - correct answer
  • BIC is a unique identifier that specifies the financial institutions involved - in some cases down to the branch level- in a financial transaction.
  1. What is IBAN? (Chapter 3) - correct answer • The international bank account number is away for banks accounts across national borders
  2. what is a captive finance company (Chapter 3) - correct answer
  • A captive finance company is a type of industrial bank that is a subsidiary of a large industrial corporation and that finances purchases solely of the corporation's products. Ford motors offer the ability to extend credit to customers so they can buy their products
  1. what is a payment system? (Chapter 4) - correct answer • A payment is series of processes and technologies that transfer monetary value from one party to another. Payments are typically made in exchange for the provision of goods and services
  2. Is cash a payment system? Why or why not? (Chapter 4) - correct answer
  • Cash payments are not payment system, since the value transfer happens as part of transfer of the coin or currency, but they constitute a critical payment method nonetheless
  1. Name the four basic participants in a payment. (Chapter 4) - correct answer • The payor makes the payment and his/her account debited for the value of the transaction
  • The payors financial institution (often referred to as paying bank) processes the value transfer on the payors behalf
  • The payee beneficiary is the receiver of the payment
  • The payees financial institution processes the transaction
  1. What are the four key elements of the payment process? (Chapter 4) - correct answer • Payment instruction are the information contained in an electronic transfer or a check
  • Payment generation is where the instructions are entered into the payment system itself
  • Clearing is the process where the FI's use the payments information to transfer money between themselves on behalf of the payor and the beneficiary
  • Settlement is the final step in the process and occurs when the beneficiary's bank account us credited and the payors bank account is charged.
  1. Discuss the difference between settlement and finality. (Chapter 4) - correct answer • Settlement- the time at which the payee can actually use the money involved
  • Finality-
  1. List the four major categories of payments, other than cash (Chapter 4) - correct answer • Checks or drafts
  • RTGS (real time gross settlement) wire transfer
  • Low value electronic payments small value wire transfer
  • Card based payments
  1. what are on- us and on- we check clearing? (Chapter 4) - correct answer • "on-us" check clearing involves a single bank and occurs when a payee deposits a check in an account at the same bank on which it is drawn
  • "on-we" check clearing is similar to on on-us but involves a group of banks that use a common third party vendor to process their checks for them.
  1. what are the four major clearing channels for transit checks in the united states? (Chapter 4) - correct answer • Clearinghouse- either formal or informal associations formed by banks in geographic area to permit the exchange of its items drawn on the member participants
  • Correspondent Bank: in correspondent bank clearing, the collecting bank maintains a depository account with another bank
  • Direct Send or Direct exchange: as an alternative to using the clearing channels just discussed collecting banks any arrange to send cash letters directly to paying bank or to a nonlocal federal reserve ban.

card industry created a governing body to establish and administer a series of strict requirements of the security card data. Merchants are required to go through an audit of their systems and applications to confirm they are compliant with the payment card industry data security standard (PCI DSS)

  1. List the major components of merchant card fees. (Chapter 4) - correct answer • Interchange fees
  • Assessments
  • Processor fees or markups