Preview Questions Treasury Manager | Role Specific Skill

Question 1: In terms of portfolio risk management, what does value-at-risk (VaR) measure?

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The proportion of assets invested in high-risk securities

The total amount of capital gains or income generated from the portfolio

The potential loss in value of an asset or portfolio over a defined time period

The total volatility of all asset classes within the portfolio

Question 2: What is a treasury manager's approach to handling surplus liquidity?

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Allocate to short-term investments

Reinvest in speculative assets

Distribute as dividends

Use for mergers and acquisitions

Question 3: Under IFRS, what is the treatment of forward foreign exchange contracts when they are used as hedging instruments?

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Recognized at fair value with changes in value reported in other comprehensive income

Recognized at cost and reported in the cash flow statement

Excluded from the financial statements until settlement

Recognized at nominal value in the balance sheet

Question 4: Which of the following is a key function of treasury operations in a financial institution?

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Managing the liquidity of the bank

Setting interest rates on loans

Managing customer relationships

Providing retail banking services

Question 5: How does a treasury manager use a risk-adjusted return on capital (RAROC) in decision-making?

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To analyze the market volatility of an asset class

To determine the creditworthiness of a counterparty

To evaluate the profitability of investments by factoring in the associated risk

To assess the liquidity of short-term investments

Question 6: What is the effect of interest rate hikes on the value of a bond portfolio?

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Bond prices remain stable

Interest rate hikes have no effect on bond prices

Bond prices generally fall as interest rates rise

Bond prices rise as interest rates increase