An instrument that gives the right to buy a stated number of shares of common stock at a specified price is known as:

A. an equity warrant

B. a put option

C. a zero coupon bond

D. a subordinated debenture

The MOST common way that companies structure their treasury operations is as a:

A. cost center.

B. profit center.

C. shared service center.

D. in-house bank.

Which of the following is a ratio that is often used by commercial banks to measure a company's leverage and does not include the effect of assets that are difficult to value or are NOT easily converted to cash?

A. Long-term debt to capital

B. Debt to tangible net worth

C. Total liabilities to total assets

D. Cash flow to total debt

An airline wants to lock in the price of the jet fuel it needs to purchase to satisfy the peak in- season demand for travel. The airline wants to manage its exposure to fluctuations in fuel prices. What type of exposure is this?

A. Translation

B. Delivery

C. Commodity

D. Speculative

A company is looking to improve its collection rate of returned checks. If the company implements represented check entry (RCK) with its bank, it might see a reduction in what type of returned items?

A. Consumer payments less than $2,500

B. Corporate payments less than $2,500

C. Consumer payments more than $2,500

D. Corporate payments more than $2,500

Company ABC is a restaurant chain that has enjoyed a surge in customers' dining with not much of a profitability increase in the last couple of years. Following a bad restaurant review, customer traffic deteriorated with not much change in profitability. Which of the following BEST describes the cost structure of the company?

A. Low variable costs

B. Economies of scale

C. Low financial leverage

D. Low operating leverage

A company can use all of the following documents to establish a relationship with a bank EXCEPT:

A. account analysis statements.

B. account resolutions.

C. service agreements.

D. signature cards.

Which of the following is normally MORE significant for a corporation?

A. Unintentional actions by employees

B. Defalcation events by employees

C. Firewall breaches by employees

D. Sarbanes-Oxley violations by employees

A trader of ABC Bank executed and audited his own trades. Assigning these two functions to the same person introduced which one of the following risks to the bank?

A. Operational risk

B. Currency risk

C. Derivatives risk

D. Regulatory risk

Which currency will sell at the greatest discount in the forward market against the U.S.dollar?

A. Euro

B. Mexican peso C. Japanese yen

D. Canadian dollar