Q27. An increase in the availability float on a company’s collections would cause a reduction in which of the following?
I. Earnings credit
II. Ledger balance
III. Service charges
IV.
Collected balance

Q28. When will a depositor receive ledger and collected credit for a western check deposited at
2:00 P.M. Wednesday?

Ledger Credit – Collected Credit

Q29. Which of the following is an example of a Eurobond?

Q30. Which of the following is the appropriate strategy to use for an active portfolio manager who is faced with an upward sloping yield curve?

Q31. A retail chain with 500 locations throughout the United States would use which of the following systems?

Q32. A nationwide retailer has been making EFT payments to its suppliers for several years. It will expand its processes to include consumer payments in its EFT initiative. Which of the following will support this initiative at the point-of-sale?

Q33. A company agrees to pay JPY10,000,000 for a shipment from Japan. At the time the purchase order is placed the exchange rate is JPY168/US$. At the time of payment the exchange rate is JPY163/US$. What is the net effect on the dollar cost of the shipment if the transaction has NOT been hedged?

Q34. The company’s monthly credit sales are in Table 1 and its receivables collection pattern is in Table
2. If this company wishes to achieve a second quarter (April-June) DSO of 60 days, what would its ending accounts receivable balance need to be?

Assume a 90-day quarter.

Q35. A new retail chain has decided to offer 3 payment methods: cash, cards and checks. It was
determined that card payments would be the biggest sales driver and projects have been scheduled accordingly. To be in line with this strategy, which of the following should be the priority?

Q36. A company can dispute any check alterations within how many days after the bank statement has been sent?

Q37. Which of the following is NOT an operational risk?

Q38. The lockbox receipt records for one 30-day month are provided below. The opportunity costs are 10%.

What is the annual cost of float rounded to the nearest dollar?

Q39. What government legislation holds the CEO of a public company personally liable for the information in financial reports?

Q40. Financial risk management requires monitoring changes in which of the following?
I. Interest rates
II. Foreign exchange rates
III. Commodity prices
IV.
Cost of insurance

Q41. Netting is used by which of the following as a cross-border payment technique?

Q42. A company invests in a bond and then later agrees to sell the bond to a bank with the understanding that the company will buy the bond back at a later time. This is known as:

Q43. In order to reduce the premiums paid to insurance companies, a company should consider retaining or self insuring for:

Q44. A company issues $5 million of commercial paper at a discount for 60 days. The interest cost is $85,000. The backup line fee for this transaction is $2,000, and the dealer fee is $1,000. What is the annual interest rate?

Q45. A multinational company (MNC) that operates a shared service center charges its foreign subsidiaries a management fee. This management fee may need to be:

Q46. A netting system can be used for all of the following EXCEPT:

Q47. A supplier can improve invoicing float by: