Skip to content

CA Intermediate · Financial Management and Strategic Management · Treasury and Cash Management

Which of the following is a treasury function that deals specifically with managing the firm's exposure to exchange rate and interest rate movements?

Risk management is the treasury function that handles exposure to exchange rate and interest rate movements. Treasury uses hedging instruments such as forwards, futures and swaps to limit losses from these fluctuations, whereas cost accounting, audit and payroll belong to other departments.

  1. ARisk managementCorrect
  2. BCost accounting
  3. CStatutory audit
  4. DPayroll processing

Explanation

Treasury management includes managing financial risks such as currency and interest rate exposures, using tools like forwards, swaps and options. Cost accounting, statutory audit and payroll are not treasury functions.

Did you get it right without looking?

One question tells you little. A timed set on Treasury and Cash Management shows your real accuracy, how long you take and where you lose marks.

Practise Treasury and Cash ManagementFree diagnostic mock

More Treasury and Cash Management questions