Company XYZ is not sure which direction interest rates are headed. Which of the following would be MOST suitable?
A. An interest rate cap
B. An interest rate floor
C. An interest rate swap
D. An interest rate collar
Company XYZ's government relations team has done a poor job in maintaining and nurturing its relationship with the local government. Because of new business ventures it is pursuing, the company needs a method that will help it monitor and collect international accounts receivables between subsidiaries. What technique is more suited given its situation?
A. Internal factoring
B. Re-invoicing
C. Bilateral netting
D. Multilateral netting
ABC Corporation receives images of paid check exception items from its bank and reviews them daily. What action should be taken on an item where the payee on the image does NOT match the data from ABC Corporation's accounts payable?
A. Bank alerts payee that check is unmatched.
B. ABC Company utilizes the holder in due course defense.
C. Image remains stored on ABC Corporation's network for future customer inquiries.
D. No-pay decision is communicated to the bank.
An analyst at Davis Company uses the tax payment (TXP) banking convention for payment of state taxes. The analyst is preparing to pay $650,000 in taxes to the state where Davis Company is domiciled. What payment method will the analyst use to make the tax payment?
A. ACH Credit
B. Fedwire Credit
C. Certified Check
D. Multiple Drawee Check
Which of the following cash concentration transfers is MOST LIKELY to result in a bank ledger overdraft?
A. A wire transfer of prior day's balances
B. A DTC of current day's lockbox deposits
C. An ACH transfer of anticipated deposits
D. An ACH transfer of one-day available funds
A company's accounts receivable balance pattern is shown in the first table. Credit sales are shown in the second table.
What is the cash inflow for the month of August?
A. $213
B. $238
C. $300
D. $633
Each of the following statements is true of both defined benefit plans and defined contribution plans EXCEPT:
A. both of the plans are typically structured as single-employer plans and maintained for employees.
B. both can be classified as overfunded or underfunded depending on the value of plan assets.
C. the treasurer is normally responsible for overseeing the performance of the plan fund managers.
D. the Pension Protection Act of 2006 includes significant changes to the rules governing both types of plans.
In a partial reconciliation, a bank provides a company with which of the following?
A. Listing of paid items
B. Listing of issued items
C. Listing of outstanding checks
D. Electronic account analysis
A company pays its vendors with the following methods:
2,600 checks, averaging $1,000 each, issued on the 15th of the month 1,000 ACH payments, averaging $2,000 each, on Wednesdays 500 ACH payments, averaging $500 each, on the first Monday of the month 10 wires on the last day of the month for approximately $260,000 each
If the company has a daylight overdraft agreement, which of the above presents the highest single-day credit risk for the bank if the company enters bankruptcy?
A. The wires
B. The ACH payments issued on Wednesdays
C. The checks
D. The ACH payments issued on the first Monday of the month
A company in a distressed financial condition may choose to use which of the following services to entice suppliers to continue to sell to it on open terms?
A. Bankers' acceptance
B. Documentary collection
C. Standby letter of credit
D. Corporate trust
