Consulting mandate and evidence lineage Review questions Consulting mandate and evidence lineage Start with a defined decision and clear authority. A delinquency ratio without a denominator is not a loss estimate, and a post-migration jump cannot be explained by one interview. Compare equal-age vintages and reconcile cash with due dates. In the risk map, distinguish supplier disruption from prior spending that might strain cash on its own. A useful finding separates established, plausible and untested claims and applies an interim decision cap while evidence is gathered.
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Question 1 A sponsor asks you to prove expansion is safe but supplies only sales data. What is the first professional response? Rate risk low from sales growth Define the decision, alternatives, required credit and cash evidence, and opinion boundary Reject all work until every company file is delivered Question 2 Delinquency rises from 4% to 7% at migration while cash is stable. Which test best separates ageing error from weak underwriting? Compare equal-age vintages and reconcile due dates around conversion Rely on stable aggregate cash alone Average the credit and collections managers’ opinions Question 3 One supplier accounts for 20% of spend but a component needed on 80% of production lines. Which description supports the decision? Concentration is low because spend share is 20% Spend share misses dependency; test line outage timing and substitutes Add 20 and 80 to produce a risk score of 100 Question 4 A deal leaves base cash at 9 million above an 8-million floor, but customer delay lowers it to 7. Which interpretation is sound? Expected profit removes the liquidity concern Delay breaches the floor; fund the gap or change timing Rename risk appetite without changing cash flows Question 5 Treasury trades, sets the limit and certifies no breach. Which design concern should be tested first? The length of the monthly report Lack of independent challenge across limit setting, execution and monitoring The fact that the trade uses foreign currency Question 6 Of 20 selected trades, 17 were confirmed the same day and three next morning. What effectiveness claim is justified now? 85% is the firm-wide rate and impact needs no review The sample shows a delay window; inspect the three sizes, settlement times and compensating controls The control has no value because three were late Question 7 Receivables are ten million, four with one customer. What conclusion follows directly? The customer has a 40% default probability The customer holds 40% of the balance; maturity and recoverability need checking The certain loss is four million Question 8 A one-million-dollar invoice has a 600,000-dollar forward at 3.80; spot at payment is 4.00. What is local-currency cost? 3.80 million 3.88 million 4.00 million Question 9 Month-end cash is 3.1 million but its within-month low is 1.5. Which value governs a week-two payment? 3.1 because it is the closing figure 1.5 or the lower daily pre-payment balance if timing shows one Their 2.3 average Question 10 A severe fire loss is eight million and absorption capacity is three. Full acceptance has zero direct cost. What matters most in comparison? Acceptance wins because no premium is paid Five million remains above capacity despite zero direct cost Fire probability is zero because none happened before Question 11 Base cash is five million; receipt delay is 1.4, extra interest 0.3, and a cancellable purchase releases 0.4. What is stressed cash? 2.9 million 3.7 million 5.1 million Question 12 Full stock uses 1.2 million of 1.5 headroom; a half-stock trial uses 0.6. What initial headroom remains? 0.3 and 0.9 million respectively 0.9 and 0.3 million respectively 1.5 in both because inventory is an asset Question 13 The board asks whether three red indicators mean growth must stop. How should the memo open? With every indicator chart first With decision request, alternatives, affected boundary, evidence and uncertainty By asserting red alone settles a halt Question 14 Overdue ratio falls from 10% of ten million to 7% of 16. What overdue amount is reported in each period? One million then 1.12 million One million then 0.7 million Ten million then 16 million Question 15 After 30 days finance cannot reconcile 15% of sampled invoices, but the concentration dashboard is green. What should happen? Raise the receivables cap because the tile is green Suspend inference from the affected dashboard and repair linkage before increasing the cap Assume 15% of the whole portfolio is lost Create a free account to mark your answers and save your progress.
