Question 1

The “agency problem” refers to:

Options :

A : management’s use of a fiduciary agent for stockholders.

B : a large and active institutional investor base acting on behalf of individual investors.

C : stockholders who allow management to take actions that will benefit management.

D : the internal audit function reporting to the audit committee of the board instead of to management.

Answer: C

Question 2

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

Options :

A : European giro providers

B : Foreign subsidiaries of a company

C : Counterparties in a letter of credit transaction

D : TARGET participants

Answer: B

Question 3

In the event of bankruptcy and the subsequent liquidation of issuer's debt, in what order,

from first to last, will the following be repaid?

1.Senior secured debt

2.Senior subordinated debt

3.Junior secured debt

4.Junior debentures

Options :

A : 1, 2, 3, 4

B : 1, 3, 2, 4

C : 2, 1, 3, 4

D : 2, 1, 4, 3

Answer: B

Question 4

All of the following are common consumer-to-corporate international payment mechanisms EXCEPT:

Options :

A : giros

B : debit cards.

C : CHIPS

D : smart cards.

Answer: C

Question 5

Evaluating the liquidity needs of an organization is a function of:

Options :

A : long-term investment yield forecasting

B : long-term cash flow forecasting.

C : short-term investment yield forecasting.

D : short-term cash flow forecasting.

Answer: D

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