TM M3 CH9 - INVESTMENT MANAGEMENT (GAME)

1. 1. The treasurer does not  determine that managing investments is not a primary skill or lacks adequate resources for an in-house investment team

• A. TRUE

• B. FALSE

2. The company retains the flexibility to select from various investment strategies and may impose limitations on asset classes for investment.

• A. TRUE

• B. FALSE

3. A straightforward strategy for mitigating risk involves refraining from investing in the securities of a single entity and, instead, opting for investments exclusively in one or more money market funds.

• A. TRUE

• B. FALSE

4. The utilization of money market funds is particularly economical for smaller treasury departments that may lack the financial means to employ an in-house investment manager.

• A. TRUE

• B. FALSE

5. ________ in accounting covers both debt and equity securities that don't fit into other specific categories. These securities are listed on the balance sheet at their fair value.

• 1. A. Available for sale

• B. Held to Maturity

• C. Trading Securities

• D. Tax Liability

6. When there's a change in the fair value of an investment in a trading or available-for-sale portfolio, or if there's a permanent decline in the value of a debt security held to maturity, it's important to acknowledge a ________.

• A. Available for sale

• B. Held to Maturity

• C. Trading Securities

• D. Tax Liability

7. __________ in accounting involves debt securities that a company intends and is able to hold until they mature. These securities are recorded on the balance sheet at their amortized cost and are typically listed as long-term assets.

• A. Available for Sale

• B. Held to Maturity

• C. Trading Securities

• D. Tax Liability

8. _________ in accounting comprises both debt and equity securities that a company plans to sell for a profit in the near future.

• A. Available for Sale

• B. Held to Maturity

• C. Trading Securities

• D. Tax Liability

9. This policy requires the financial staff to have a certain amount of cash on hand. The fixed dollar amount in the policy should be looked at often to make sure it matches the estimated needs for working capital in the near future.

• A. TRUE

• B. FALSE

10. The average maturity of the investment portfolio shall be limited to ___ years is a a strategy that is  meant to stop a company from investing in things with maturities that are too long.

• A. TRUE

• B. FALSE