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What is global cash management meant to do for a firm?
AManage cash flows, speed payment, cut operational risk
BInsure its overseas deposits against political risk
CFix the exchange rate it pays on every transaction
DRaise long-term capital by issuing bonds overseas
Answer & Solution
Correct answer: A. Manage cash flows, speed payment, cut operational risk
1. Global cash management is one of the trade-related services banks offer to international firms.
2. It helps a firm manage its cash flows across borders.
3. It improves the payment efficiency of the firm.
4. It also reduces the exposure of the firm to operational risks.
5. Raising long-term capital is a financing service rather than cash management, so it belongs elsewhere.
_Source: OpenStax Introduction to Business (CC BY 4.0), Ch 15 "Understanding Money and Financial Institutions", section 15.5 International Banking_
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