CTP · Question #376
(Topic 4) RAL Capital, a lean global financial service provider with revenues of $8 billion, has 10 regional offices located around the world. The RAL global trading groups are structured as profit ce
The correct answer is D. Pressure to produce significant profits may lead to deferred losses and inefficient. See the full explanation below for the reasoning.
Question
- (Topic 4)
RAL Capital, a lean global financial service provider with revenues of $8 billion, has 10 regional offices located around the world. The RAL global trading groups are structured as profit centers with each center having its own profitability targets. The group’s clients consist of large multinational corporations and financial institutions that require the buying and selling of large amounts of currency. The Treasurer is considering reorganizing his department into a profit center. The group processes millions of transactions every year. What is a downside of this scenario?
Options
- AMay become a viable candidate for downsizing or outsourcing.
- BNeed to decentralize treasury operations in order to make a profit center more viable.
- CSubstantial headcount is required to support a profit generation center.
- DPressure to produce significant profits may lead to deferred losses and inefficient
How the community answered
(58 responses)- A7% (4)
- B3% (2)
- C16% (9)
- D74% (43)
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