Question 1

The stock of a manufacturing company is priced so that its expected rate of return is below its required rate, as calculated by the Capital Asset Pricing Model (CAPM). Which of the following will occur in an efficient capital market?

Options :

A : Buying pressure for the firm’s stock will drive the price up.

B : Buying pressure for the firm’s stock will drive the price down.

C : Selling pressure for the firm’s stock will drive the price up.

D : Selling pressure for the firm’s stock will drive the price down.

Answer: D

Question 2

Today’s modern cash management systems would include which of the following?

Options :

A : Full integration to ERP systems

B : Performance management systems and support

C : Remote check disbursement software

D : Full customer relationship management (CRM) capability

Answer: A

Question 3

Which of the following situations is the best example of transaction exposure?

Options :

A : A U.S. headquartered firm consolidates their foreign subsidiary’s financial statements into their home currency

B : A company that purchases raw materials locally and sells its products in local markets recently encountered foreign competition.

C : A U.S. exporter sells merchandise to a French buyer and records a balance receivable with payment terms in euros due in three months

D : A multinational corporation uses balance sheet hedging to reduce net exposure of the parent company.

Answer: C

Question 4

A multinational corporation with many FSPs requires a TMS that can display extensive and complex information in an effective manner. The corporation will be looking for a TMS with what functionality?

Options :

A : Bank administration

B : Dashboards

C : Data integration

D : Modularity

Answer: B

Question 5

All of the following are common consumer-to-corporate international payment mechanisms EXCEPT:

Options :

A : giros

B : debit cards.

C : CHIPS

D : smart cards.

Answer: C

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