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Question 1 of 30
1. Question
Which of the following statements is true regarding rating systems and the possible risks?
Correct
Rating systems and the possible risks
Some investments are not rated. Unrated investments should be thoroughly assessed for risk of liquidity (i.e. whether they can be readily sold again). The longer a security is held, the greater chance that the interest rate and /or price will change significantly and possibly cause a loss. So, generally, investments with a shorter term until maturity have a lower risk but lower yield compared to the investments that have a longer term until maturity. Investments that deal in foreign securities or currencies have the added risk of a change in currency rate of exchange between the countries involved.Incorrect
Rating systems and the possible risks
Some investments are not rated. Unrated investments should be thoroughly assessed for risk of liquidity (i.e. whether they can be readily sold again). The longer a security is held, the greater chance that the interest rate and /or price will change significantly and possibly cause a loss. So, generally, investments with a shorter term until maturity have a lower risk but lower yield compared to the investments that have a longer term until maturity. Investments that deal in foreign securities or currencies have the added risk of a change in currency rate of exchange between the countries involved. -
Question 2 of 30
2. Question
Which of the following statements is true regarding the money markets and the advantage of these short term investments?
Correct
The money markets and the advantage of these short term investments
Money markets are where short term debt securities are traded over the counter between investors, brokers, and dealers. These transactions occur electronically in book-entry form. Money market investments are generally the most appropriate kind of short term investment. They can be readily resold because of the large volume.Incorrect
The money markets and the advantage of these short term investments
Money markets are where short term debt securities are traded over the counter between investors, brokers, and dealers. These transactions occur electronically in book-entry form. Money market investments are generally the most appropriate kind of short term investment. They can be readily resold because of the large volume. -
Question 3 of 30
3. Question
Which of the following statements is true regarding the money markets and the advantage of these short term investments?
Correct
The money markets and the advantage of these short term investments
There is little chance of default and have a low price risk because they are usually very short term. The only major downside of money market investments is that they also have a low yield. However, some money market funds are tax free, and so the yield might be comparable to other longer term investments. To determine the taxable equivalent yield of the short term investment, divide the tax exempt yield by 1- marginal tax rate.Incorrect
The money markets and the advantage of these short term investments
There is little chance of default and have a low price risk because they are usually very short term. The only major downside of money market investments is that they also have a low yield. However, some money market funds are tax free, and so the yield might be comparable to other longer term investments. To determine the taxable equivalent yield of the short term investment, divide the tax exempt yield by 1- marginal tax rate. -
Question 4 of 30
4. Question
Which of the following statements is true regarding money markets?
Correct
Money markets
The purpose of the money markets is raise funds. Firms and government entities sell their debt by issuing securities (i.e. money market securities) electronically via book entry. The U.S. Treasury is the greatest issuer of securities in the money markets, however the US. Treasury does not use the money markets for investment. Corporations and banks both issue and invest in money market securities.Incorrect
Money markets
The purpose of the money markets is raise funds. Firms and government entities sell their debt by issuing securities (i.e. money market securities) electronically via book entry. The U.S. Treasury is the greatest issuer of securities in the money markets, however the US. Treasury does not use the money markets for investment. Corporations and banks both issue and invest in money market securities. -
Question 5 of 30
5. Question
Which of the following statements is true regarding money markets?
Correct
Money markets
Corporations and banks both issue and invest in money market securities. Security dealers and brokers trade these issued securities on the secondary market. The Federal Reserve acts as an agent for the U.S. Treasury by trading in government securities through the Open Market Committee but it does this solely to fulfill monetary policy. The Federal Reserve also handles the settlement of most money market transactions. Because of the active trading in money market securities, their liquidity and price risk is very low.Incorrect
Money markets
Corporations and banks both issue and invest in money market securities. Security dealers and brokers trade these issued securities on the secondary market. The Federal Reserve acts as an agent for the U.S. Treasury by trading in government securities through the Open Market Committee but it does this solely to fulfill monetary policy. The Federal Reserve also handles the settlement of most money market transactions. Because of the active trading in money market securities, their liquidity and price risk is very low. -
Question 6 of 30
6. Question
Which of the following statements is true regarding securities?
Correct
Securities
To raise funds needed to run the government, the U.S. Treasury issues treasury bills (T-bills), treasury notes, and treasury bonds (T-bonds). T- bills have the shortest maturity of 26 weeks maximum. Treasury notes have maturity of 10 years maximum. T-bonds have maturity of 30 years maximum.Incorrect
Securities
To raise funds needed to run the government, the U.S. Treasury issues treasury bills (T-bills), treasury notes, and treasury bonds (T-bonds). T- bills have the shortest maturity of 26 weeks maximum. Treasury notes have maturity of 10 years maximum. T-bonds have maturity of 30 years maximum. -
Question 7 of 30
7. Question
Which of the following statements is true regarding securities?
Correct
Securities
All of these U.S. Treasury securities are guaranteed by the U.S. government. They have a high volume of trading on the secondary market and so are considered to have extremely low liquidity risk (i.e. they can be readily sold). The U.S. government, through congress, also created government sponsored enterprises (GSE) such as Fannie Mae, Sallie Mae, and Federal Home Loan banks to provide loans to home buyers, students, and farmers. Because these loans are sponsored by the U.S. government, they have been securitized and sold as mortgage backed securities (MBS) and now there is a strong secondary market for them. GSE securities have only implied federal guarantees.Incorrect
Securities
All of these U.S. Treasury securities are guaranteed by the U.S. government. They have a high volume of trading on the secondary market and so are considered to have extremely low liquidity risk (i.e. they can be readily sold). The U.S. government, through congress, also created government sponsored enterprises (GSE) such as Fannie Mae, Sallie Mae, and Federal Home Loan banks to provide loans to home buyers, students, and farmers. Because these loans are sponsored by the U.S. government, they have been securitized and sold as mortgage backed securities (MBS) and now there is a strong secondary market for them. GSE securities have only implied federal guarantees. -
Question 8 of 30
8. Question
Which of the following statements is false regarding securities?
Correct
Securities
All of these U.S. Treasury securities are guaranteed by the U.S. government. They have a high volume of trading on the secondary market and so are considered to have extremely low liquidity risk (i.e. they can be readily sold). The U.S. government, through congress, also created government sponsored enterprises (GSE) such as Fannie Mae, Sallie Mae, and Federal Home Loan banks to provide loans to home buyers, students, and farmers. Because these loans are sponsored by the U.S. government, they have been securitized and sold as mortgage backed securities (MBS) and now there is a strong secondary market for them. GSE securities have only implied federal guarantees.Incorrect
Securities
All of these U.S. Treasury securities are guaranteed by the U.S. government. They have a high volume of trading on the secondary market and so are considered to have extremely low liquidity risk (i.e. they can be readily sold). The U.S. government, through congress, also created government sponsored enterprises (GSE) such as Fannie Mae, Sallie Mae, and Federal Home Loan banks to provide loans to home buyers, students, and farmers. Because these loans are sponsored by the U.S. government, they have been securitized and sold as mortgage backed securities (MBS) and now there is a strong secondary market for them. GSE securities have only implied federal guarantees. -
Question 9 of 30
9. Question
Which of the following statements is true regarding securities?
Correct
All of these U.S. Treasury securities are guaranteed by the U.S. government. They have a high volume of trading on the secondary market and so are considered to have extremely low liquidity risk (i.e. they can be readily sold). The U.S. government, through congress, also created government sponsored enterprises (GSE) such as Fannie Mae, Sallie Mae, and Federal Home Loan banks to provide loans to home buyers, students, and farmers. Because these loans are sponsored by the U.S. government, they have been securitized and sold as mortgage backed securities (MBS) and now there is a strong secondary market for them. GSE securities have only implied federal guarantees.
Incorrect
All of these U.S. Treasury securities are guaranteed by the U.S. government. They have a high volume of trading on the secondary market and so are considered to have extremely low liquidity risk (i.e. they can be readily sold). The U.S. government, through congress, also created government sponsored enterprises (GSE) such as Fannie Mae, Sallie Mae, and Federal Home Loan banks to provide loans to home buyers, students, and farmers. Because these loans are sponsored by the U.S. government, they have been securitized and sold as mortgage backed securities (MBS) and now there is a strong secondary market for them. GSE securities have only implied federal guarantees.
-
Question 10 of 30
10. Question
Which of the following statements is true regarding Money Market Mutual Funds?
Correct
Money Market Mutual Funds
Firms that have excess short term cash can invest in short term debt issues via money market instruments. However, money market securities like T-bills and municipal securities require very high dollar amounts to be invested, between $10,000 and $100,000, initially. This can make the investment too unattainable for the short term. Money market Mutual Funds (MMMF) have low initial investment requirements, typically less than $5000.Incorrect
Money Market Mutual Funds
Firms that have excess short term cash can invest in short term debt issues via money market instruments. However, money market securities like T-bills and municipal securities require very high dollar amounts to be invested, between $10,000 and $100,000, initially. This can make the investment too unattainable for the short term. Money market Mutual Funds (MMMF) have low initial investment requirements, typically less than $5000. -
Question 11 of 30
11. Question
Which of the following statements is false regarding Money Market Mutual Funds?
Correct
Money Market Mutual Funds
A MMMF is a group of high quality, high liquidity, debt instruments that are purchased by the bank, mutual fund or broker/dealer. The investor then just buys shares in the money market fund as opposed to buying the actual security. Because MMMFs are safe, very flexible, and are professionally managed, they are a good choice for short term investment of smaller firms.Incorrect
Money Market Mutual Funds
A MMMF is a group of high quality, high liquidity, debt instruments that are purchased by the bank, mutual fund or broker/dealer. The investor then just buys shares in the money market fund as opposed to buying the actual security. Because MMMFs are safe, very flexible, and are professionally managed, they are a good choice for short term investment of smaller firms. -
Question 12 of 30
12. Question
Which of the following statements is true regarding improved technology?
Correct
Improved technology
Because of improved Enterprise Resource Planning (ERP) systems, this information sharing technology has become more utilized by more industries. In addition, Treasury management systems (TMS) have made treasuries more efficient. A firm’s treasury can now have access to a concentrated source of the firm’s financial information and can easily track financial activities like account transactions and cash-flow events.Incorrect
Improved technology
Because of improved Enterprise Resource Planning (ERP) systems, this information sharing technology has become more utilized by more industries. In addition, Treasury management systems (TMS) have made treasuries more efficient. A firm’s treasury can now have access to a concentrated source of the firm’s financial information and can easily track financial activities like account transactions and cash-flow events. -
Question 13 of 30
13. Question
Which of the following statements is false regarding improved technology?
Correct
Improved technology
The cash manager can then easily compile , analyze, and report the information, using a standardized cash position worksheet, to the appropriate managers on a regular or as needed basis. Cash positions should be reported daily. Short term cash forecasts should be submitted monthly. Maturity schedules for debt payments and short term investments should be submitted quarterly. The
firm’s cash liquidity plan should be submitted annually.Incorrect
Improved technology
The cash manager can then easily compile , analyze, and report the information, using a standardized cash position worksheet, to the appropriate managers on a regular or as needed basis. Cash positions should be reported daily. Short term cash forecasts should be submitted monthly. Maturity schedules for debt payments and short term investments should be submitted quarterly. The
firm’s cash liquidity plan should be submitted annually. -
Question 14 of 30
14. Question
Which of the following statements is true regarding format to transmit data?
Correct
Format to transmit data
When a firm needs to transmit data from its treasury management system (TMS) to its financial service provider (FSP) it can use the internet to access the FSP’s website or a dial up connection that uses a modem to link to the FSP’s computers. The Accredited Standards Committee (ASC) has developed an Electronic Data Interchange (EDI) format for transmitting data. Just as other payment and accounting documents like invoices and ledgers have become standardized, EDI is a data format that standardizes this financial information for electronic exchange between departments and between firms.Incorrect
Format to transmit data
When a firm needs to transmit data from its treasury management system (TMS) to its financial service provider (FSP) it can use the internet to access the FSP’s website or a dial up connection that uses a modem to link to the FSP’s computers. The Accredited Standards Committee (ASC) has developed an Electronic Data Interchange (EDI) format for transmitting data. Just as other payment and accounting documents like invoices and ledgers have become standardized, EDI is a data format that standardizes this financial information for electronic exchange between departments and between firms. -
Question 15 of 30
15. Question
Which of the following statements is true regarding format to transmit data?
Correct
Format to transmit data
When a firm needs to transmit data from its treasury management system (TMS) to its financial service provider (FSP) it can use the internet to access the FSP’s website or a dial up connection that uses a modem to link to the FSP’s computers. The Accredited Standards Committee (ASC) has developed an Electronic Data Interchange (EDI) format for transmitting data. Just as other payment and accounting documents like invoices and ledgers have become standardized, EDI is a data format that standardizes this financial information for electronic exchange between departments and between firms. The other data formats that firms could use when transmitting data include the Bank Administration Institute (BAI) format or, for international transactions, the Society for Worldwide Interbank Financial Telecommunications (SWIFT) format which includes more details than the other formats. Increasingly, FSPs are using internet based, service providing, programs.Incorrect
Format to transmit data
When a firm needs to transmit data from its treasury management system (TMS) to its financial service provider (FSP) it can use the internet to access the FSP’s website or a dial up connection that uses a modem to link to the FSP’s computers. The Accredited Standards Committee (ASC) has developed an Electronic Data Interchange (EDI) format for transmitting data. Just as other payment and accounting documents like invoices and ledgers have become standardized, EDI is a data format that standardizes this financial information for electronic exchange between departments and between firms. The other data formats that firms could use when transmitting data include the Bank Administration Institute (BAI) format or, for international transactions, the Society for Worldwide Interbank Financial Telecommunications (SWIFT) format which includes more details than the other formats. Increasingly, FSPs are using internet based, service providing, programs. -
Question 16 of 30
16. Question
Which of the following statements is true regarding Treasury Management System?
I. It is a computer program that enables a firm to complete a variety of tasks
II. It has the capability to report balances, determine cash position and complete a cash forecast, manage investment portfolios, etc
III. It can’t consolidate internal and external financial data that is used for financial planning
IV. It can be integrated with the financial service provider’s (FSP) computer system or within the firm’s computer systemCorrect
Treasury Management System
A Treasury Management System (TMS) is a computer program that enables a firm to complete a variety of tasks, depending on its features. Generally, a TMS has the capability to report balances, determine cash position and complete a cash forecast, manage investment portfolios, schedule debt servicing, and make payments. It can consolidate internal and external financial data that is used for financial planning. The TMS can be integrated with the financial service provider’s (FSP) computer system or within the firm’s computer system.Incorrect
Treasury Management System
A Treasury Management System (TMS) is a computer program that enables a firm to complete a variety of tasks, depending on its features. Generally, a TMS has the capability to report balances, determine cash position and complete a cash forecast, manage investment portfolios, schedule debt servicing, and make payments. It can consolidate internal and external financial data that is used for financial planning. The TMS can be integrated with the financial service provider’s (FSP) computer system or within the firm’s computer system. -
Question 17 of 30
17. Question
Which of the following statements is true regarding Treasury Management System?
I. It can be integrated with the financial service provider’s (FSP) computer system or within the firm’s computer system
II. Alternatively, a TMS could be provided by a third party internet based entity
III. Straight Through Processing (STP) would make data transfer even more efficient by eliminating the need to re-enter data
IV. The electronic version could be limited to only a single formatCorrect
Treasury Management System
The TMS can be integrated with the financial service provider’s (FSP) computer system or within the firm’s computer system. Alternatively, a TMS could be provided by a third party internet based entity. A new system that is still in
development called Straight Through Processing (STP) would make data transfer even more efficient by eliminating the need to re-enter data that was already electronically transferred. The electronic version could be adapted to whatever format was needed.Incorrect
Treasury Management System
The TMS can be integrated with the financial service provider’s (FSP) computer system or within the firm’s computer system. Alternatively, a TMS could be provided by a third party internet based entity. A new system that is still in
development called Straight Through Processing (STP) would make data transfer even more efficient by eliminating the need to re-enter data that was already electronically transferred. The electronic version could be adapted to whatever format was needed. -
Question 18 of 30
18. Question
Which of the following statements is true regarding security measures?
I. A TMS consolidates information electronically, it is important to back up the data in a secondary data storage system
II. This data back up should be part of a firm’s disaster recovery plan and should be tested at least bi-annually
III. To avoid losing the data it is important to damage the software from protection due to computer viruses and/or power surges
IV. Another security issue associated with the TMS is unauthorized accessCorrect
Security measures
Because a Treasury Management System (TMS) consolidates information electronically, it is important to back up the data in a secondary data storage system (i.e. disk, CD, or an online storage medium). This data back up should be part of a
firm’s disaster recovery plan and should be tested at least bi-annually. To avoid losing the data it is also important to protect the software from damage due to computer viruses and/or power surges. Another security issue associated with the TMS is authorized access.Incorrect
Security measures
Because a Treasury Management System (TMS) consolidates information electronically, it is important to back up the data in a secondary data storage system (i.e. disk, CD, or an online storage medium). This data back up should be part of a
firm’s disaster recovery plan and should be tested at least bi-annually. To avoid losing the data it is also important to protect the software from damage due to computer viruses and/or power surges. Another security issue associated with the TMS is authorized access. -
Question 19 of 30
19. Question
Which of the following statements is true regarding aecurity measures?
I. The firm should limit access to the information using a password system, message authentication, and encryptions
II. All access should be monitored and access should be segregated
III. An example, payment approval areas should be accessible to those unauthorized to access payment initiation areas
IV. The system administrator should monitor activity and verify that the security measures are being complied witCorrect
Security measures
The firm should limit access to the information using a password system, message authentication, and encryptions. All access should be monitored and access should be segregated. For example, payment approval areas should not be accessible to those authorized to access payment initiation areas and balance reporting areas. The system administrator should monitor activity and verify that the security measures are being complied with.Incorrect
Security measures
The firm should limit access to the information using a password system, message authentication, and encryptions. All access should be monitored and access should be segregated. For example, payment approval areas should not be accessible to those authorized to access payment initiation areas and balance reporting areas. The system administrator should monitor activity and verify that the security measures are being complied with. -
Question 20 of 30
20. Question
Which of the following statements is true regarding Electronic Data Interchange?
I. In the late 1960s, the transportation industry developed a set of industry specific communications standards
II. That evolved into a set of standards that couldn’t be used for the electronic transfer of data
III. The Electronic Data Interchange (EDI) became the standard format used for each of these industries
IV. The ASC has developed an Electronic Data Interchange (EDI) format for electronically transmitting the data of various industriesCorrect
Electronic Data Interchange
In the late 1960s, the transportation industry (i.e. air, railroad, ocean shipping, and trucking) developed a set of industry specific communications standards that evolved into a set of standards that would be used for the electronic transfer of data. The Electronic Data Interchange (EDI) became the standard format used for each of these industries. The Accredited Standards Committee (ASC) has developed an Electronic Data Interchange (EDI) format for electronically transmitting the data of various industries, beyond transportation to include retail and food.Incorrect
Electronic Data Interchange
In the late 1960s, the transportation industry (i.e. air, railroad, ocean shipping, and trucking) developed a set of industry specific communications standards that evolved into a set of standards that would be used for the electronic transfer of data. The Electronic Data Interchange (EDI) became the standard format used for each of these industries. The Accredited Standards Committee (ASC) has developed an Electronic Data Interchange (EDI) format for electronically transmitting the data of various industries, beyond transportation to include retail and food. -
Question 21 of 30
21. Question
Which of the following statements is true regarding Electronic Data Interchange?
I. The ASC goal was to abolish EDI standards that couldn’t be used between different industries
II. The ASC developed the ASC X12 standards for various transactions, including invoices, customer accounts, and lockbox information among others
III. Not all firms within an industry transfer their data electronically partly because the Uniform Commercial Code (UCC) requires a physical signature to authorize transactions
IV. Electronic signatures were considered legal until the Electronic Signatures in Global and National Commerce Act was passedCorrect
Electronic Data Interchange
The ASC goal was to establish EDI standards that could be used between different industries. The ASC developed the ASC X12 standards for various transactions, including invoices, customer accounts, and lockbox information among others. Not all firms within an industry transfer their data electronically partly because the Uniform Commercial Code (UCC) requires a physical signature to authorize transactions. Electronic signatures were not considered legal until the Electronic Signatures in Global and National Commerce Act was passed in 2000, and now more firms are using EDI for financial transactions.Incorrect
Electronic Data Interchange
The ASC goal was to establish EDI standards that could be used between different industries. The ASC developed the ASC X12 standards for various transactions, including invoices, customer accounts, and lockbox information among others. Not all firms within an industry transfer their data electronically partly because the Uniform Commercial Code (UCC) requires a physical signature to authorize transactions. Electronic signatures were not considered legal until the Electronic Signatures in Global and National Commerce Act was passed in 2000, and now more firms are using EDI for financial transactions. -
Question 22 of 30
22. Question
Which of the following statements is true regarding ASC X12 electronic equivalents?
I. The Accredited Standards Committee (ASC) developed transaction sets using Electronic Data Interchange (EDI) format
II. The National Automated Clearing House Association (NACHA) established that paper based documents associated with certain transactions could have electronic equivalents
III. The electronic equivalent for invoices is 810-Invoice; for customer accounts it is 822-Customer Account Analysis;, etc.
IV. These electronic equivalents can’t be accessed through EDI softwareCorrect
ASC X12 electronic equivalents
The Accredited Standards Committee (ASC) developed transaction sets using Electronic Data Interchange (EDI) format. The National Automated Clearing House Association (NACHA) established that paper based documents associated with certain transactions could have electronic equivalents. The electronic equivalent for invoices is 810-Invoice; for customer accounts it is 822-Customer Account Analysis; for ACH transfers it is 820-Payment Order/Remittance Advice; for transaction summaries it is 821-Financial Information Reporting; for lockbox check information it is 823-Lockbox Information; for data acceptance information it is 824 application Advice; for electronic debits it is 828- Debit Authorization; for receipt confirmation it is 997-Functional Acknowledgement. These electronic equivalents can be accessed through EDI software.Incorrect
ASC X12 electronic equivalents
The Accredited Standards Committee (ASC) developed transaction sets using Electronic Data Interchange (EDI) format. The National Automated Clearing House Association (NACHA) established that paper based documents associated with certain transactions could have electronic equivalents. The electronic equivalent for invoices is 810-Invoice; for customer accounts it is 822-Customer Account Analysis; for ACH transfers it is 820-Payment Order/Remittance Advice; for transaction summaries it is 821-Financial Information Reporting; for lockbox check information it is 823-Lockbox Information; for data acceptance information it is 824 application Advice; for electronic debits it is 828- Debit Authorization; for receipt confirmation it is 997-Functional Acknowledgement. These electronic equivalents can be accessed through EDI software. -
Question 23 of 30
23. Question
Which of the following statements is true regarding ASC X12 electronic equivalents?
I. The electronic equivalent for invoices is 810-Invoice
II. For customer accounts it is 822-Customer Account Analysis
III. For ACH transfers it is 820-Payment Order/Remittance Advice
IV. For transaction summaries it is 821-Financial Information ReportingCorrect
ASC X12 electronic equivalents
The Accredited Standards Committee (ASC) developed transaction sets using Electronic Data Interchange (EDI) format. The National Automated Clearing House Association (NACHA) established that paper based documents associated with certain transactions could have electronic equivalents. The electronic equivalent for invoices is 810-Invoice; for customer accounts it is 822-Customer Account Analysis; for ACH transfers it is 820-Payment Order/Remittance Advice; for transaction summaries it is 821-Financial Information Reporting; for lockbox check information it is 823-Lockbox Information; for data acceptance information it is 824 application Advice; for electronic debits it is 828- Debit Authorization; for receipt confirmation it is 997-Functional Acknowledgement. These electronic equivalents can be accessed through EDI software.Incorrect
ASC X12 electronic equivalents
The Accredited Standards Committee (ASC) developed transaction sets using Electronic Data Interchange (EDI) format. The National Automated Clearing House Association (NACHA) established that paper based documents associated with certain transactions could have electronic equivalents. The electronic equivalent for invoices is 810-Invoice; for customer accounts it is 822-Customer Account Analysis; for ACH transfers it is 820-Payment Order/Remittance Advice; for transaction summaries it is 821-Financial Information Reporting; for lockbox check information it is 823-Lockbox Information; for data acceptance information it is 824 application Advice; for electronic debits it is 828- Debit Authorization; for receipt confirmation it is 997-Functional Acknowledgement. These electronic equivalents can be accessed through EDI software. -
Question 24 of 30
24. Question
Which of the following statements is true regarding Value Added Network?
I. EDI formats are evolving as revisions improve its application within an industry and between industries
II. Firms that have earlier EDI versions that are consistent with current versions can’t use EDI software
III. The EDI software that will not translate but convert the EDI to whatever the firm needs
IV. Firms that have the most current EDI format but have older or just different computer systems or protocolsCorrect
Value Added Network
EDI formats are evolving as revisions improve its application within an industry and between industries. Firms that have earlier EDI versions that are no longer consistent with current versions can use EDI software that will translate or convert the EDI to whatever the firm needs. Firms that have the most current EDI format but have older or just different computer systems or protocols that are not compatible with a potential trading partner can use the numerous Value Added Networks (VAN).Incorrect
Value Added Network
EDI formats are evolving as revisions improve its application within an industry and between industries. Firms that have earlier EDI versions that are no longer consistent with current versions can use EDI software that will translate or convert the EDI to whatever the firm needs. Firms that have the most current EDI format but have older or just different computer systems or protocols that are not compatible with a potential trading partner can use the numerous Value Added Networks (VAN). -
Question 25 of 30
25. Question
Which of the following statements is true regarding Value Added Network?
I. Firms that have the most current EDI format but have older or just different computer systems or protocols that are not compatible with a potential trading partner can use the numerous Value Added Networks (VAN)
II. A VAN is a network that can facilitate communication between various computer systems
III. It delivers messages, sends them, adds any pertinent information, and then forwards them to the specified trading partner
IV. VANs can also provide security services, training, and can host industry specific services including paymentCorrect
Value Added Network
Firms that have the most current EDI format but have older or just different computer systems or protocols that are not compatible with a potential trading partner can use the numerous Value Added Networks (VAN). A VAN is a network that can facilitate communication between various computer systems. It receives messages, translates them, adds any pertinent information, and then forwards them to the specified trading partner. VANs can also provide security services, training, and can host industry specific services including payment.Incorrect
Value Added Network
Firms that have the most current EDI format but have older or just different computer systems or protocols that are not compatible with a potential trading partner can use the numerous Value Added Networks (VAN). A VAN is a network that can facilitate communication between various computer systems. It receives messages, translates them, adds any pertinent information, and then forwards them to the specified trading partner. VANs can also provide security services, training, and can host industry specific services including payment. -
Question 26 of 30
26. Question
Which of the following statements is true regarding Internet?
I. Any firm that uses the internet to conduct business transactions must ignore an Internet Service Provider (ISP)
II. An ISP uses dial up, DSL, broadband wireless access and/or one of several other technologies that enable access to the internet
III. Business software is usually unavailable from Application Software Providers (ASP)
IV. The applications that ASPs provide can be installed on individual computersCorrect
Internet
Any firm that uses the internet to conduct business transactions must use an Internet Service Provider (ISP). An ISP uses dial up, DSL, broadband wireless access and/or one of several other technologies that enable access to the internet. Business software is increasingly available from Application Software Providers (ASP). The applications that ASPs provide can be installed on individual computers, however it is more efficient to obtain the services from the ASP via the ISP.Incorrect
Internet
Any firm that uses the internet to conduct business transactions must use an Internet Service Provider (ISP). An ISP uses dial up, DSL, broadband wireless access and/or one of several other technologies that enable access to the internet. Business software is increasingly available from Application Software Providers (ASP). The applications that ASPs provide can be installed on individual computers, however it is more efficient to obtain the services from the ASP via the ISP. -
Question 27 of 30
27. Question
Which of the following statements is true regarding Internet?
I. Business software is usually unavailable from Application Software Providers (ASP)
II. The application should be disintegrated into the firm’s Enterprise Resource Planning (ERP) system for minimum inefficiency
III. The security measures should be able to authenticate the originator of a message and verify that the message was not altered
IV. If applicable, the privacy of the information should be securedCorrect
Internet
Business software is increasingly available from Application Software Providers (ASP). The applications that ASPs provide can be installed on individual computers, however it is more efficient to obtain the services from the ASP via the ISP. The application should be integrated into the firm’s Enterprise Resource Planning (ERP) system for maximum efficiency. When a firm uses an ASP, however, it should opt for the security features that will help protect their proprietary information. The security measures should be able to authenticate the originator of a message and verify that the message was not altered. If applicable, the privacy of the information should be secured.Incorrect
Internet
Business software is increasingly available from Application Software Providers (ASP). The applications that ASPs provide can be installed on individual computers, however it is more efficient to obtain the services from the ASP via the ISP. The application should be integrated into the firm’s Enterprise Resource Planning (ERP) system for maximum efficiency. When a firm uses an ASP, however, it should opt for the security features that will help protect their proprietary information. The security measures should be able to authenticate the originator of a message and verify that the message was not altered. If applicable, the privacy of the information should be secured. -
Question 28 of 30
28. Question
Which of the following statements is true regarding security measures?
I. When a firm permits their information to be externally accessed via the internet, they should take measures to regulate that access and protect the information from unauthorized access
II. A firewall is a specific software program that acts as a filter for all incoming data
III. The incoming data must be disapproved before entering the firm’s computer system
IV. Approval is based on the firm’s general criteriaCorrect
Security measures
When a firm permits their information to be externally accessed via the internet, they should take measures to regulate that access and protect the information from unauthorized access. A firewall is a specific software program that acts as a filter for all incoming data. The incoming data must be approved before entering the firm’s computer system. Approval is based on the firm’s specific criteria. To prevent ‘eavesdropping’ of a firm’s communications, an encrypted protocol such as TLS (Transport Layer Security) or its predecessor SSL (secure socket layer) can be used.Incorrect
Security measures
When a firm permits their information to be externally accessed via the internet, they should take measures to regulate that access and protect the information from unauthorized access. A firewall is a specific software program that acts as a filter for all incoming data. The incoming data must be approved before entering the firm’s computer system. Approval is based on the firm’s specific criteria. To prevent ‘eavesdropping’ of a firm’s communications, an encrypted protocol such as TLS (Transport Layer Security) or its predecessor SSL (secure socket layer) can be used. -
Question 29 of 30
29. Question
Which of the following statements is true regarding security measures?
I. With Public Key Infrastructure (PKI), there are a public key and private key
II. The public key can be used by the company only to send data, messages, etc
III. The private key is required to access the information
IV. Only authorized persons are allowed access to the public keyCorrect
Security measures
To prevent ‘eavesdropping’ of a firm’s communications, an encrypted protocol such as TLS (Transport Layer Security) or its predecessor SSL (secure socket layer) can be used. With this protocol, only one end of the communication is authenticated. When it is necessary that both parties to the communication be authenticated, a Public Key Infrastructure (PKI) can be used. With PKI, there is a public key (i.e. PIN and password) and private key (i.e. a PIN, a password, and/or digital signature). The public key can be used by anyone to send data, messages, etc. The private key is required to access the information. Only authorized persons are allowed access to the private key.Incorrect
Security measures
To prevent ‘eavesdropping’ of a firm’s communications, an encrypted protocol such as TLS (Transport Layer Security) or its predecessor SSL (secure socket layer) can be used. With this protocol, only one end of the communication is authenticated. When it is necessary that both parties to the communication be authenticated, a Public Key Infrastructure (PKI) can be used. With PKI, there is a public key (i.e. PIN and password) and private key (i.e. a PIN, a password, and/or digital signature). The public key can be used by anyone to send data, messages, etc. The private key is required to access the information. Only authorized persons are allowed access to the private key. -
Question 30 of 30
30. Question
Which of the following statements is true regarding electronic networks?
I. There are several ways a firm can communicate electronically
II. They can use the internet, an intranet, and/or an extranet
III. All of these networks can use any of the internet protocols like HTTP and FTP (File Transfer Protocol)
IV. The main advantage to the internet is that it is inaccessible by the general public and firms typically do not want their internal processes available for such scrutinyCorrect
Electronic networks
There are several ways a firm can communicate electronically. They can use the internet, an intranet, and/or an extranet. All of these networks can use any of the internet protocols like HTTP (Hypertext Transfer Protocol) and FTP (File Transfer Protocol). The main disadvantage to the internet is that it is accessible by the general public and firms typically do not want their internal processes available for such scrutiny. An intranet is only accessible by computers within the firm.Incorrect
Electronic networks
There are several ways a firm can communicate electronically. They can use the internet, an intranet, and/or an extranet. All of these networks can use any of the internet protocols like HTTP (Hypertext Transfer Protocol) and FTP (File Transfer Protocol). The main disadvantage to the internet is that it is accessible by the general public and firms typically do not want their internal processes available for such scrutiny. An intranet is only accessible by computers within the firm.