Practice Test Geeks(CCM) Certified Cash Manager Practice Test
← All CCM Flashcard Decks

Investment and Short-Term Financing Flashcards

7 cards from real CCM practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 7 Investment and Short-Term Financing flashcards as text

  1. Which portfolio strategy involves maintaining a consistent allocation across multiple maturity buckets regardless of interest rate forecasts?

    Answer: Laddering

    A laddered portfolio staggers maturities so that a portion of the portfolio matures regularly, reducing reinvestment and liquidity risk.

  2. A money market fund that 'breaks the buck' means its NAV has fallen below:

    Answer: $1.00 per share

    Money market funds target a stable $1.00 NAV; breaking the buck means the fund's assets can no longer support this price.

  3. Under SEC Rule 2a-7, government money market funds must hold at least what percentage of assets in daily liquid assets?

    Answer: 10%

    Rule 2a-7 requires government money market funds to maintain at least 10% of total assets in daily liquid assets.

  4. Which of the following best describes the 'barbell' investment strategy?

    Answer: Concentrating investments at both very short and very long maturities

    A barbell concentrates assets at the two extremes of the maturity spectrum, combining liquidity from short-term holdings with yield from longer-term holdings.

  5. Factoring differs from accounts receivable pledging primarily because in factoring:

    Answer: The factor purchases the receivables outright and assumes credit risk

    In factoring, the factor buys the receivables, takes on credit risk, and handles collections, whereas pledging keeps receivables on the borrower's books.

  6. Which short-term interest rate benchmark replaced LIBOR as the preferred reference rate for U.S. dollar derivatives and loans?

    Answer: SOFR (Secured Overnight Financing Rate)

    SOFR, based on overnight Treasury repo transactions, was designated as the LIBOR replacement for USD instruments by the ARRC.

  7. A company with surplus cash invests in a 6-month CD at 4.80% annual rate. The bond equivalent yield (BEY) for comparison to a T-bill is calculated using how many days in a year?

    Answer: 365 days

    The bond equivalent yield uses a 365-day year to allow apples-to-apples comparison with coupon-bearing Treasury securities.