Preview Questions Treasury Manager | Role Specific Skill

Question 1: When using currency hedging as a risk mitigation strategy, which of the following instruments can help protect against currency fluctuations?

Which action should you take?

Choose only one option

Equity swaps

Commodity futures

Credit derivatives

Currency options and forwards

Question 2: Which of the following investment instruments is most suitable for managing liquidity risk in a Treasury Manager's portfolio?

Which action should you take?

Choose only one option

Money market instruments such as Treasury bills or commercial paper

Equity investments in emerging markets

High-risk derivatives for speculative returns

High-yield corporate bonds for long-term capital appreciation

Question 3: What is the primary objective of a Treasury Manager in managing the liquidity gap?

Which action should you take?

Choose only one option

To maximize returns on cash while minimizing the risks

To ensure the company can meet its short-term obligations without compromising profitability

To reduce operational costs while ensuring liquidity

To maintain sufficient liquidity while minimizing debt levels

Question 4: How does credit risk affect a Treasury Manager's decision when selecting counterparties for investment?

Which action should you take?

Choose only one option

The Treasury Manager should focus on diversification and ignore credit risk

It only affects liquid assets and cash positions

It impacts only long-term investments, not short-term ones

The Treasury Manager must assess the creditworthiness and the likelihood of default

Question 5: How does IFRS 9 impact the classification of financial assets for Treasury Managers?

Which action should you take?

Choose only one option

It requires a "held to maturity" classification for all assets

It requires a new approach to the classification and measurement of financial assets based on business model and contractual cash flows

It maintains the same classification as under IAS 39

It mandates all assets to be classified as "available for sale"

Question 6: In managing credit risk, which strategy is typically employed to limit exposure to individual borrowers?

Which action should you take?

Choose only one option

Setting exposure limits and diversifying credit portfolios

Concentrating investments in high-risk assets for greater returns

Using leverage to amplify returns

Offering flexible terms to high-risk borrowers