CCM Cash Management Fundamentals 3

Question 1

A controlled disbursement account notifies a company of the day's check presentments by:

Accepted Answer

Early morning of the presentment day

Answer

Controlled disbursement accounts provide an early-morning funding notification so the company can transfer only the exact amount needed to cover that day's checks.

Question 2

The Baumol model for optimal cash balance is analogous to which inventory concept?

Accepted Answer

Economic Order Quantity (EOQ)

Answer

The Baumol model applies EOQ logic to cash, balancing the fixed cost of converting securities to cash against the opportunity cost of holding idle cash.

Question 3

Which type of netting arrangement consolidates intercompany payments across multiple subsidiaries into a single net settlement?

Accepted Answer

Multilateral netting

Answer

Multilateral netting calculates each entity's net position against all others simultaneously, reducing the total number and value of cross-border transfers.

Question 4

A company receives a large one-time payment and needs to invest it for exactly 47 days. Which instrument is most appropriate?

Accepted Answer

Term repurchase agreement

Answer

A term repurchase agreement can be structured for a specific number of days, providing a precise 47-day maturity match with minimal credit risk.

Question 5

Under SWIFT's MT940 message type, what financial information is communicated?

Accepted Answer

Customer account statement (end-of-day balance and transaction detail)

Answer

MT940 is the SWIFT standard statement message transmitting end-of-day account balances and transaction details from a bank to its corporate customer.

(CCM) Certified Cash Manager Practice Test

(CCM) Certified Cash Manager Practice Test

CCM Cash Management Fundamentals 3