Preview Questions Treasury Manager | Role Specific Skill

Question 1: 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

Question 2: Which of the following describes a yield curve inversion and its significance to investment strategies?

Which action should you take?

Choose only one option

It is a sign of market instability with no economic implications

It signals inflationary pressures and declining bond prices

It suggests that short-term rates are higher than long-term rates

It indicates economic growth and a rise in interest rates

Question 3: Which of the following best describes the term 'free cash flow' in cash flow management?

Which action should you take?

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Cash available after accounting for capital expenditures

Cash flow from operating activities

Cash flow after tax adjustments

Cash flow from financing activities

Question 4: In the context of risk management, what does liquidity risk refer to?

Which action should you take?

Choose only one option

The risk of financial losses due to interest rate changes

The risk of default by a counterparty in a financial transaction

The risk of being unable to meet short-term financial obligations due to cash flow mismatches

The risk of investments losing value due to market fluctuations

Question 5: In the context of financial reporting, what is the treatment of forward foreign exchange contracts under IFRS?

Which action should you take?

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They are excluded from the financial statements

They are reported only at settlement

They are reported at fair value with changes recognized in Other Comprehensive Income (OCI) or profit and loss depending on the hedge designation

They are reported at historical cost

Question 6: How can a Treasury Manager measure and mitigate liquidity risk when dealing with a large portfolio of short-term assets?

Which action should you take?

Choose only one option

By conducting stress tests to determine the potential for liquidity shortfalls

By investing exclusively in long-term securities

By concentrating investments in equity markets

By focusing on high-yield, non-liquid assets