QUESTION 22

Mr Sibusiso Bengu informs you that in the past few years, the company experienced numerous challenges with Standard Bank and that the bank’s poor services are negatively impacting the operations of Dalton Ltd. He requests that you, as the company treasurer, give him the authority to open a new bank account with ABSA Bank for the Roodepoort branch.

Which of the following statements do you agree with?

a.    Mr Bengu has 10 years’ experience; he established a good relationship with banks previously, and he knows precisely what he is doing. Yes, you authorise him to open a new bank account.

b.    No, you do not authorise him to open the new bank account with ABSA.

C.         You authorise him to open the bank account with Nedbank because it offers a lower interest rate

d.         You refer him to the board of directors.

QUESTION 24

Which of the following statements

are correct?

a.    Future

contracts are traded on a formal exchange.

b.    Forward

contracts are traded over the exchange.

c.     Forward

contracts are not traded over-the-counter.

d.    Forward

contracts are traded over-the-counter.

1.    A and B

2.    A and C

3.    B and C

4.    A and D

QUESTION 21

Which one of the following 

sweeping strategies

is used at Dalton Ltd?

a.    Percentage

sweeping method

b.    Fixed

amount sweeping method  

c.     Threshold

sweeping method

d.    Range-based

sweeping method.

QUESTION 23

Upon reviewing the operational

processes and procedures at Dalton Ltd, what type of risks do you expect to see

being covered in the company’s policy documents?

a.    Liquidity

risk policy, dealing policy, credit risk policy, commodity risk policy, foreign

exchange rate policy.

b.    Interest

rate risk policy, credit risk policy, foreign exchange rate policy, liquidity

risk policy.

c.     Commodity

risk policy, Inter-company funding policy, interest rate risk policy,

ring-fencing policy.

d.    foreign

exchange rate risk policy, ring-fencing policy, intercompany funding policy,

commodity risk policy.

QUESTION 25

Match column A

with column B below:

The correct

option/match is …

a,

1. c; 2. d; 3.b

b, 1. d; 2. a;

3.c

c, 1. e; 2. b;

3 e

d, 1. d; 2. e;

3.a

QUESTION 18

Which one of the following types

of risk is accepted by Dalton Ltd?

a.    Liquidity

risk

b.    Interest

rate risk

c.     Credit

risk

d.    Foreign

exchange risk

QUESTION 17

Some of the tasks

that you are required to perform by the company as the treasurer are not the

key performance areas for a corporate treasurer.

False

True

QUESTION 20

The interest payable if the

business (Dalton) uses 20% of the revolving credit limit for 28 days, and the

interest is calculated on a daily basis, is equal … .

a.    R449.13

b.    R760.41

c.     R870.30

d.    R980.31

QUESTION 14

A depreciation of R600 000 (R3

000 000/5) that will be written off by Dalton at the end of the following

financial year after replacing the injection moulding will be part of expenses

and will be treated as a cash outflow.

a.    True

b.    False

QUESTION 15

The forecasts of Dalton Ltd's

cash flow indicate that there will be a cash deficit of R898 100 in April, May,

and June 2025. In financing this shortage, the company will issue a 90-day

banker’s acceptance bill, which its bank will guarantee by accepting it, and

the bill will then be discounted in the market with the relevant discount rate.

The company will receive R970 100 in exchange for the bill, which will require

that the company pay the nominal amount of R1 000 000 within 90 days.

The cost of the bankers’

acceptance for the company (which is a yield to the bank) is ….

a.    4,76%

b.    5.73%

c.     6.11%

d.    7.6%

NB. Ignore the capital

budgeting process depreciation calculations.