Domestic and Global Markets Treasury

Domestic and global markets treasury is the area of treasury that deals with the management of a company’s finances in both domestic and international markets. This includes activities such as:

• Investing in domestic and global securities: Treasury departments invest excess funds in a variety of securities, including government bonds, corporate bonds, and equities. They may also invest in foreign currencies.
• Managing foreign exchange risk: Treasury departments need to manage the risk that their profits or losses will be affected by changes in foreign exchange rates. They can do this by hedging their exposure to foreign currencies.
• Raising capital: Treasury departments may need to raise capital to finance growth or acquisitions. They can do this by issuing debt securities, such as bonds, or by issuing equity securities, such as shares of stock.
• Managing liquidity: Treasury departments need to ensure that they have sufficient cash on hand to meet their obligations. They do this by managing their cash flow and by investing in short-term securities.

MCQs on domestic and global markets treasury

1. Which of the following is not a function of domestic and global markets treasury?
   • Investing in domestic and global securities
   • Managing foreign exchange risk
   • Raising capital
   • Managing liquidity
   • Answer: Accounting
2. Treasury departments need to manage the risk that their profits or losses will be affected by changes in foreign exchange rates. This is known as:
   • Foreign exchange risk
   • Interest rate risk
   • Liquidity risk
   • Market risk
   • Answer: Foreign exchange risk
3. Treasury departments may need to raise capital to finance growth or acquisitions. They can do this by issuing debt securities, such as:
   • Bonds
   • Shares of stock
   • Commercial paper
   • Repurchase agreements (repos)
   • Answer: Bonds
4. Treasury departments need to ensure that they have sufficient cash on hand to meet their obligations. They do this by managing their:
   • Cash flow
   • Investments
   • Debt
   • Equity
   • Answer: Cash flow
5. Treasury departments typically use a variety of tools to manage their finances in both domestic and international markets. These tools include:
   • Financial models
   • Risk management software
   • Treasury management systems (TMS)
   • Treasury professionals
   • Answer: All of the above

Conclusion

Domestic and global markets treasury is a complex and ever-changing field. Treasury departments need to stay up-to-date on the latest market trends and risks in order to manage their finances effectively.

Here are some additional points about domestic and global markets treasury:

• Treasury departments need to have a good understanding of the different financial markets, both domestic and international.
• Treasury departments need to be able to assess the risks and rewards of different investment opportunities.
• Treasury departments need to be able to manage their cash flow effectively.
• Treasury departments need to be able to hedge against risk.
• Treasury departments need to be able to raise capital when needed.

Domestic and global markets treasury is a critical function for any company that operates in multiple countries. Treasury departments play a vital role in ensuring that the company has the financial resources it needs to succeed.