QUESTION 5

Which of the

following statements correctly describes the disadvantage of cash

concentration?

1. Sweeping cash to different

   subsidiaries or sub-accounts can delay payments if it is not done in real

   time.

2. It enforces a bureaucratic

   management approach where subsidiaries have less autonomy.

3. It enhances ACH to clear

   cash and transfers it electronically and rapidly.

4. It may expose the business

   to liquidity risk at the sub-account level.

1.    a,

b and c

2.    a,

b and d

3.    b,

c and d

4.    a,

c and d