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CTP · Question #355
CTP Question #355: Real Exam Question with Answer & Explanation
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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.
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