8/3/2019 MCQ Finance

1/5

Which of the following represents a reasonably sensible but aggressivefinancing policy?

Which of the following would not normally be the responsibility of the

corporate treasurer?

Managing temporary surplus cash

Production costing and product pricing

Foreign exchange risk management

Risk management and investment

8/3/2019 MCQ Finance

2/5

Which one of the following would not be a significant issue to consider

when deciding whether to borrow 'long or short'?

The uncertainty of getting future finance

The yield curve

The maturity structure of current debt

The availability of fixed asset collateral

Which of the following classes of risk cannot generally be avoided,

hedged and/or mitigated?

Financial risk

Interest rate risk

Currency risk

Business risk

Which one of the following describes the cash conversion cycle?

The stock conversion period plus debtor conversion period minus credit grantedby suppliers

The raw material stock period plus stock conversion period minus credit period

granted by suppliers

The debtor conversion period minus the credit period granted by suppliers

The credit period granted by suppliers plus raw material stock period plus work-in-progress period plus finished goods inventory period

8/3/2019 MCQ Finance

3/5

Which diagram is correct?

Which of the following best describes overtrading?

When a business is short of fixed assets to sustain its level of trading

When a business expands at a rate faster than is sensible, given its stock ofmanagerial talent

When a firm chooses to switch production to an overseas base

When a business has insufficient finance for investment in working capital tosustain its level of trading

8/3/2019 MCQ Finance

4/5

Which of the following is not an economic motive for holding cash?

Transaction motive

Speculative motive

Precautionary motive

Saving motive

Using Baumol's cash model, the optimum amount to transfer regularly

into cash for a firm which receives 6 per cent interest on invested

cash, is charged 50 every time money is withdrawn and has anannual need for cash of 150,000, is:

3,873

11,180

180

15,811

Which of the following tasks is a Treasurer most unlikely to carry out?

Advise on sources of finance and export finance

Supply product costing information

Deal with banking relationships and arrangements

Manage the company's currency and cash flows

8/3/2019 MCQ Finance

5/5

Which of the following is false?

Finished goods = Average value of finished goods sold per day

inventory period Average cost of goods sold per day

Credit period = Average level of debtors

Purchases from debtors per day

Work-in-progress = Average value of work-in-progress

period Average cost of goods sold per day

Raw materials = Average value of raw materials stock

stock period Average purchase of raw materials per day