The Treasury Manager of a privately held company is looking to finance new equipment that has a useful life of 5 years. What type of financing would the Treasury Manager MOST LIKELY employ to finance the equipment?

• A.Equity shares
• B.High-yield bond
• C.Long-term bond
• D.Installment term loan

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Given the above information,

if the risk manager adds a tank at its second facility, what loss control technique is being used?

• A.Separation of exposures
• B.Exposure avoidance
• C.Limiting contractual acceptance of risk
• D.Catastrophic loss control

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What is one chief advantage of issuing short-term securities in book-entry form?

• A.Transaction clearing can be performed with ease and speed.
• B.The securities cannot be transferred electronically.
• C.Security registration is not required.
• D.The physical exchange of certificates is required.

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A put option gives the holder the right to:

• A.sell short shares of the underlying stock at the strike price.
• B.buy long shares of the underlying stock at the strike price.
• C.buy the underlying stock at the strike price.
• D.sell the underlying stock at the strike price.

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Company ABC decides to outsource certain activities to an unrelated company and have that company assume the associated loss exposures. What loss control technique is Company ABC using?

• A.Control of isolated losses
• B.Contractual transfer
• C.Risk retention group
• D.Separation of exposures

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