Preview Questions Treasury Manager | Role Specific Skill

Question 1: What is the main objective of using a portfolio insurance strategy?

Which action should you take?

Choose only one option

To increase the overall portfolio return

To hedge against interest rate movements

To diversify the portfolio's assets

To protect the portfolio from significant downside risk

Question 2: When using the Capital Asset Pricing Model (CAPM) to evaluate investment opportunities, which factor has the greatest impact on expected returns?

Which action should you take?

Choose only one option

The risk-free rate and market risk premium

Economic conditions and interest rate changes

Asset diversification across different industries

Company size and market capitalization

Question 3: How should Treasury Managers approach managing a company's excess liquidity?

Which action should you take?

Choose only one option

It should be used to pay down long-term debt immediately

It should be held in cash to avoid any investment risks

Excess liquidity should be invested in short-term, low-risk instruments to generate returns

It should be distributed as dividends to shareholders

Question 4: What is the role of cash flow forecasting in managing a company's financial strategy?

Which action should you take?

Choose only one option

To predict the company's ability to meet short-term obligations

To project long-term capital structure and profitability

To estimate the company's future debt requirements

To ensure the company can manage its working capital needs

Question 5: In financial planning, which of the following is a critical consideration when projecting capital expenditure for treasury management?

Which action should you take?

Choose only one option

Impact of inflation on future costs

Expected returns from previous capital projects

Cash flow availability for debt servicing

Potential fluctuations in stock price affecting the capital plan

Question 6: What is the primary advantage of scenario planning in financial forecasting?

Which action should you take?

Choose only one option

Reduces operational costs

Improves accuracy

Enhances risk assessment

Increases compliance