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FIN3703-25-EX10
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QUESTION 10
Which of the following statements refers to the purpose of pooling cash into a single concentration account?
a. To reduce the dependency on short-term financing from financial institutions.
b. To improve cash and liquidity management from the subsidiaries’ point of view.
c. To use concentrated cash for large short-term investments.
d. To delay cash payments to the suppliers when cash flow is tight.
1. a and b
2.b and c
3. a and c
4.c and d
QUESTION 9
The most popular method of handling a cash surplus is using capital market financial instruments.
A. True
B. False
QUESTION 8
The yield to maturity associated with the offer is equal to …
a) 7.03%.
b) 7.34%.
c) 7.61%.
d) 7.92%.
FOR QUESTIONS 7 AND 8, REFER TO THE FOLLOWING INFORMATION:
You have been presented with the following information about the Treasury Bills (TBs) that are trading in the secondary market:
Bid/offer = 7.53%/7.35%
Face value = R100 000
Days to maturity = 55
(Note: Use 365 days.)
QUESTION 7
Which of the following statements is correct?
a. The price maker is prepared to buy TBs at 7.35%.
b. The price maker is prepared to sell TBs at 7.53%.
c. The above bid would translate into a price of R98,866.
d. The above offer would translate into a price of R98,893.
1. a and c
2. a and b
3. b and c
4. c and d
QUESTION 6
Match column A with column B below:
COLUMN A
|
|
COLUMN B
| |
1
|
Front office
|
a
|
Produces plans to achieve targets
|
2
|
Middle office
|
b
|
Leads the treasury department
|
3
|
Back office
|
c
|
Settle authorised transactions
|
|
|
d
|
Determine the profit and loss of products
|
|
|
e
|
Guidance on product pricing
|
The correct option/match is …
a, 1. c; 2. d; 3.b
b, 1. d; 2. a; 3.c
c, 1. e; 2. d; 3.c
d, 1. d; 2. e; 3.a
QUESTION 5
McDonald is the most experienced financial officer at ABC Ltd treasury department. Most of his responsibilities are to ensure that subsidiaries' bank accounts stay at R450 000 or below. If the subsidiary's accounts exceed R450 000, the amount by which the account exceeds R450 00 000 is transferred to the head (master account) office account
Which one of the following sweeping strategies is used by McDonald at ABC Ltd?
a. Predetermine minimum balance method
b. Fixed amount sweeping method
c. Threshold sweeping method
d. Range-based sweeping method
QUESTION 4
FOR QUESTIONS 4, REFER TO THE FOLLOWING INFORMATION:
You have been presented with the following information about Reserve Bank Debenture (RBD) that has been issued by the South African Reserve Bank (TBs) to ABSA Bank:
Amount invested/nominal value = R20 million
Issue date = 23 April 2025
Maturity date = 13 May 2025
Days = 20 days
Interest = 9.4 p.a.
(Note: Use 365 days.)
The South African Reserve Bank must therefore pay … in interest to ABSA Bank at the end of the period.
- R102 800
- R152 800
- R161 800
- R170 800
QUESTION 3
Which of the following statements correctly describes the characteristics of the money market instruments?
a. The par value of the money market security is the same as the issue value.
b. The issue value is a discounted amount of the par payable by the investors.
c. The yield or actual return is the same as the discount rate.
d. In most cases, the issuance value will be less than the par value.
1. a and b
2. b and c
3. a and c
4. b and d
QUESTION 2
The discount value of a Treasury Bill (TB) with a nominal value of R1 000 000, issued for a period of 80 days at a consideration value of R 980 119.70
a. R 18 880, 30.
b. R 19 880, 30
c. R 20 880, 30.
d. R 21 880, 30.
NB: Use 365 days.
QUESTION 1
A good example of a risk avoidance strategy would be when Tiger Brand Limited, a manufacturer of fast-moving consumer goods …
a. chose not to do business any longer with countries like Russia and Ukraine, where there is political uncertainty and war.
b. Insures all the trucks with the Miway insurance company.
c. Invest the surplus cash in multiple money market financial instruments.
d. Agree to set a price to sell bread on a predetermined date in the future, and at the time of delivery, irrespective of the bread’s current price, Tiger Brand Limited executes the contract at a price agreed upon.