Chapter 1 Role of Treasury Management

Question 1

Major objectives of treasury management

Answer 1

Liquidity
Optimize Cash Resources
Manage Risk
Access to Short-Term Borrowing
Investments
Access to Long-Term Borrowing
Coordinate Financial Functions
Enhance Global Focus

Question 2

Five objectives of ERISA Employee Retirement Income Security Act

Answer 2

Ensure beneficiaries receive adequate information
Set standards of conduct for managers
Determine adequate funds to set aside
Ensure receipt of benefits satisfy minimum requirements
Safeguard benefits for pension plans that are terminated

Question 3

Basel 3 Outline

Answer 3

TBD

Question 4

Principles of GAAP

Answer 4

Historic cost
Full disclosure
Revenue recognition
Matching principle

Question 5

ASC Topic 320 Codes

Answer 5

Trading Securities
Held to Maturity
Available for Sale

Question 6

What is Form 5500

Answer 6

Annual reporting req. for ERISA in Title I & IV

Important to compliance, research and disclosure for DOL.

Question 7

WACC

Answer 7

Weighted Avg Cost Capital; the mix of long term debt and equity and the costs of each called Capital Structure
Each capital component determines risk of that security market.

Question 8

Break Even Analysis

Answer 8

Level of activity in Ops at which cost = benefit

Used to determine min. sales at given price to cover costs

Question 9

NPV v IRR

Answer 9

NPV = Netted Present Value of Cash Inflows
IRR = Discount rate that makes NPV zero or equal to cash outflows