CTP · Question #355
(Topic 4) XYZ Company experienced a substantial monetary loss due to over exposure to one particular sector of the stock market. The Treasurer had invested in companies tied to five different…
Sign in or unlock CTP to reveal the answer and full explanation for question #355. The question stem and answer options stay visible for context.
Question
- (Topic 4)
XYZ Company experienced a substantial monetary loss due to over exposure to one particular sector of the stock market. The Treasurer had invested in companies tied to five different sectors, but violated the company investment policy by exceeding a 10% limit for any sector. In developing its investment policy, what should XYZ Company have considered to prevent this scenario?
Options
- AShort-term interest rates are expected to rise.
- BThe company would like to improve bank relationships.
- CCash shortages are being forecasted due to seasonality.
- DThere is an anticipated failure of the company's main depository bank.
Unlock CTP to see the answer
You've previewed enough free CTP questions. Unlock CTP for full answers, explanations, the timed quiz mode, progress tracking, and the master PDF. Question stem and options stay visible so you can still see what's on the exam.