Treasury Management: Objectives, Forecasting, and Hedging
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Questions and Answers

What is the primary objective of a company's treasury function?

  • To optimize the company's tax strategy
  • To manage financial risks and ensure liquidity (correct)
  • To oversee the company's investment portfolio
  • To maximize shareholder value
  • What is the primary role of a cash flow forecast in treasury management?

  • To predict future cash inflows and outflows (correct)
  • To identify potential investment opportunities
  • To manage foreign exchange risk
  • To optimize the company's capital structure
  • What is the term for the process of converting a company's financial statements from one currency to another?

  • Consolidation
  • Translation (correct)
  • Conversion
  • Transaction
  • What is the primary purpose of hedging in treasury management?

    <p>To reduce financial risk by locking in a fixed price or rate</p> Signup and view all the answers

    What is the term for the risk of changes in interest rates affecting a company's financial performance?

    <p>Interest rate risk</p> Signup and view all the answers

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