QUESTION

20

Which

of the following factors must be considered by the treasury before committing

the surplus funds to the commercial paper?

a.    

b.    

c.    

d.    

1.    a only

2.   

a, b, and d

only

3.    a, b, c, and d

4.   

a, c, and d

only

QUESTION

19

Match the steps in the risk management process in

column A with the descriptions in column B below:

The correct option to match the steps and descriptions

is …

a. 1. E;  2. D;

3. A; 4. B; 5. C

b. 1. D;  2. C;

3. B; 4. E; 5. A

c. 1. A;  2 .E;

3. B; 4. C; 5. D

d. 1. D; 2 .C; 3. B; 4. A; 5. E

QUESTION 18

In

investing the surplus cash, the treasurer at Madiba Ltd bought commercial paper

at R300,000 with a face value of R310,000, a maturity of 100 days, and

brokerage fees and other charges of 4%.

The yield

of the commercial paper is … if the company holds the commercial paper until

maturity.

a.    18.05%

b.    22.11%

c.     26.12%

d.    28.42%

QUESTION

17                                                                                                    

The market for previously issued securities and the

market for financial instruments with a relatively short-term maturity of less

than one year are known as the … market and … market, respectively.

a.    primary; secondary

b.    secondary; capital

c.     secondary; money

d.    primary; money

QUESTION

16

The

managing directors of Non-Barbalas Beer Ltd, a manufacturer and distributor of

alcoholic beverages located in Rosslyn, stated that the company’s

Based

on Non-Barbalas Beer Ltd information above, the business portrays or

exemplifies a good example of …

1. complete

   decentralisation.

2. incomplete

   decentration.

3. complete

   centralisation.

4. incomplete

   centralisation.

1.   

2.   

3.   

4.   

b and

d

QUESTION

15

Segregation

of duties refers to a process in which the treasurer

A.       True  

QUESTION 14                                                                                                    

Match

column A with column B below:

The correct option/match is …

a,

1;c, 2;d, 3;e, 4;a,5;b

b,

1;d, 2;a, 3;e, 4;c, 5;b

c,

1;a, 2;f, 3;e, 4;c,5;b

d,

1;c, 2;a, 3;d, 4;f,5;b

QUESTION 13

The cost to the company of the roll-over

will come to … which is equal to a discount rate of 11.5%.

1. R28 356.17
2. R28 541.10
3. R28 721.90
4. R28 127.87

QUESTION

12

To

lock in a discount rate of 11.5%, the company will have to receive an amount of

… from the other party, determined.

1. R4

   931.50

2. R5

   390.10

3. R5

   657.31

4. R5

   844.68

FOR QUESTIONS 11 TO 13, REFER TO THE FOLLOWING

INFORMATION:

It is expected that the short-term interest will rise, and you

wish to hedge the next roll over of the bankers’ acceptance bill with a forward

rate agreement (FRA).

Assume the following applies:

Roll-over                

            :15 August

 Settlement date                 

         :18 May

Spot rate on 15

August         

             :13.5%

FRA spot

(Bid/offer)          

                 :10.5%/11.5%

Nominal value                              :R1

000 000

Days                                            :90

days

QUESTION 11

The cost of the transaction is equal to ….

1. R29

   171.34

2. R30

   761.14

3. R33

   287.67

4. R35 258.32