Preview Questions Treasury Manager | Role Specific Skill

Question 1: Which type of insurance is most commonly used by Treasury Managers to mitigate the risk of loss due to fraud?

Which action should you take?

Choose only one option

Fidelity insurance

Fire insurance

Property insurance

Credit default swaps

Question 2: What is a common method used by treasury managers to assess credit risk in counterparties?

Which action should you take?

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Evaluating credit ratings, financial health, and counterparty exposure

Calculating capital adequacy ratios

Monitoring short-term cash flow ratios

Assessing inventory turnover ratios

Question 3: What role does scenario analysis play in risk mitigation for treasury management?

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It calculates the expected return of the portfolio

It helps identify potential risks and their impact on the portfolio under various hypothetical conditions

It measures the portfolio's historical volatility

It determines the tax implications of investments

Question 4: Which of the following is the primary objective of risk management in treasury operations?

Which action should you take?

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To reduce liquidity without affecting operational performance

To ensure that the company can meet its financial obligations while minimizing risks

To maximize returns on investments regardless of risk

To focus solely on long-term strategic goals

Question 5: What does the term 'duration risk' refer to in treasury management?

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The risk of foreign exchange fluctuations on international investments

The risk of liquidity shortages during market crises

The risk of insufficient cash reserves in the short term

The risk associated with changes in interest rates affecting the value of long-term assets

Question 6: What is a typical risk management tool used by treasury managers to hedge against foreign exchange risks?

Which action should you take?

Choose only one option

Commodity options

Currency swaps

Interest rate swaps

Treasury bonds