CTM — Certificate in Treasury Management Cash Practice Questions

A company receives a large cash influx. What should the treasury manager prioritize first?

• AA. Pay off debts
• BB. Establish a liquidity buffer
• CC. Invest in risky assets
• DD. Secure cash-related fraud

In treasury management, what is a key reason for performing regular cash flow forecasting?

• AA. To maximize bank fees
• BB. To avoid overinvestment
• CC. To improve supplier relations
• DD. To prevent cash shortages

If a firm has a high level of cash reserves, what is a potential risk if not managed properly?

• AA. Inefficient use of capital
• BB. Increased credit rating
• CC. Enhanced market position
• DD. Financial stability

What tool can treasurers use to smooth cash flows despite seasonal downturns?

• AA. Equities
• BB. Bonds
• CC. Stock buybacks
• DD. Lines of credit

What does a negative cash flow indicate during an accounting period?

• AA. Profitability
• BB. High solvency
• CC. Insufficient cash reserves
• DD. Positive investment growth

What is the primary purpose of a cash management system?

• AA. Manage compliance
• BB. Streamline cash handling
• CC. Increase investment
• DD. Minimize transactions