Preview Questions Treasury Manager | Role Specific Skill

Question 1: Which of the following is the best practice for Treasury Managers to maintain optimal cash levels in an organization?

Which action should you take?

Choose only one option

Maintaining a balance between operating liquidity and investment

Relying on external financing for cash flow gaps

Holding excess cash in low-interest accounts

Constantly reinvesting excess cash into risky speculative investments

Question 2: When implementing a risk mitigation strategy using hedging, what is the primary risk being mitigated with a currency forward contract?

Which action should you take?

Choose only one option

Inflation risk

Exchange rate risk

Liquidity risk

Interest rate risk

Question 3: What is a key consideration when selecting between a treasury bond and a corporate bond for an investment portfolio?

Which action should you take?

Choose only one option

Treasury bonds are risk-free and provide stability in portfolios

Corporate bonds are more liquid compared to treasury bonds

Treasury bonds offer more flexibility in terms of interest payments

The corporate bond yields higher returns due to credit risk

Question 4: What is the role of cash flow management in managing debt service obligations?

Which action should you take?

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To delay debt repayments to free up cash

To increase leverage to finance additional investments

To ensure that the company has adequate cash reserves to meet its debt obligations on time

To reduce interest rates on debt

Question 5: How can a Treasury Manager reduce cash flow volatility in the BFSI sector?

Which action should you take?

Choose only one option

By reducing capital expenditures and operational costs

By increasing customer receivables without limiting risk

By diversifying cash holdings and using short-term investment instruments

By increasing long-term debt levels to manage liquidity

Question 6: What is the most effective strategy for a Treasury Manager to mitigate cash flow risk during volatile financial markets?

Which action should you take?

Choose only one option

Increasing leverage through long-term borrowing

Reducing cash reserves and focusing on short-term profit

Hedging cash flow exposure with derivative instruments

Expanding the loan portfolio to generate higher returns