The Client Side
A company's own finance function: the treasurer who actually signs the hedge, and the team that explains the results to the investors who own the shares.
The customer: The company every seat above is selling to. the whole map
The seats
two of them, each answering the same six questions so that they can be read against each other.
What an interview asks here
The client every desk on this site sells to, and the questions are checking whether you know that a hedge here is not a position.
Try each one out loud before you open it. What is underneath is the shape of a complete answer, not a script — somebody who can produce those parts in their own words can also answer the four variations that follow, and somebody who has memorised a paragraph can answer one.
Q1How is a corporate hedge different from a trading position?
What it is checking. The distinction the whole seat rests on, and the answer is about where the exposure came from.
A complete answer contains:
- A trading desk takes a position on purpose and hedges to flatten a risk it chose.
- A treasury hedges a risk the operating business produced by selling in another currency or borrowing at a floating rate.
- The aim is a known cash flow rather than a good outcome, which is why the policy is written down and approved by a board.
- A view taken because the market looked wrong is a position nobody authorised, however well it works.
Read it properly: Corporate treasury · Hedging
Q2A hedge was economically right and nearly destroyed the company. How?
What it is checking. The timing mismatch, which is the single most instructive failure in corporate treasury.
A complete answer contains:
- The hedge moved against the company in the short run and produced margin calls in cash.
- The offsetting gain sat in an exposure that would only be realised over years, and did not pay anything today.
- So the position was correct and unfundable, which is a liquidity failure rather than a hedging one.
- Which is why any hedging policy has to model the collateral profile, not only the economic offset.
Read it properly: 1993 · Margin and collateral
Q3What does 'trapped cash' mean and why does it matter?
What it is checking. A consolidated balance is not a usable balance, and this is where treasurers actually live.
A complete answer contains:
- Cash sitting in a subsidiary that cannot legally or practically move to where it is needed — capital controls, tax, minority shareholders, local requirements.
- The group balance sheet shows one total; the treasury sees a set of pools with walls between them.
- So liquidity is a question about location and timing rather than about the sum.
- And a company can be comfortable in aggregate and unable to pay something on time.
Read it properly: Corporate treasury · Transaction banking
Q4Why would a company issue a bond rather than draw on a bank facility?
What it is checking. Whether you can compare two ways of borrowing from the borrower's side rather than the bank's.
A complete answer contains:
- Tenor: bonds reach maturities banks will not lend at, and without amortisation.
- Covenants: bond documentation is usually lighter, and the lenders are dispersed rather than in one room.
- Cost and capacity vary with the market, and the bank facility is often kept undrawn as a backstop precisely because it is committed.
- The trade is flexibility: a bank can be renegotiated, hundreds of bondholders largely cannot.
Read it properly: A bond against a loan · The DCM desk
Q5What is investor relations actually constrained by?
What it is checking. It looks like communications and it is governed by disclosure law.
A complete answer contains:
- Anything that would move the price has to reach everybody at once; a fact given to one investor in a meeting and not to the market is a legal problem.
- So the seat can explain and contextualise what has been disclosed, and cannot add to it privately.
- That is what shapes the calendar: results, then a defined period of meetings, then a quiet period.
- The test is what a reasonable investor would use, not what feels important internally.
Read it properly: Investor relations · Reading an annual report
Q6A company beats last year's earnings and the shares fall. Explain it to the chief executive.
What it is checking. Expectations against outcomes, from the side of the company rather than the investor.
A complete answer contains:
- The market prices what it expected, and the consensus had already moved past last year.
- So the comparison that moves the price is against the expectation, not against the prior period.
- Guidance is part of what set that expectation, which is why giving it is a commitment rather than a courtesy.
- And the durable fix is a consensus that tracks the business, which is this seat's actual measure.
Read it properly: Why a share price falls · Research
Q7Why does a company care about its credit rating even if it is not issuing?
What it is checking. A rating is a constraint on the business, not only on the funding cost.
A complete answer contains:
- It sets the price and the availability of the next borrowing, including the committed facilities already in place.
- Contracts reference it: some counterparties require collateral or a guarantee below a threshold.
- It affects what customers and suppliers will do on credit terms, which is an operating question rather than a financing one.
- So a rating is defended with balance sheet decisions long before any issuance is planned.
Read it properly: Reading a credit rating · Corporate treasury
Do these against a clock — one at a time, ninety seconds each, answer before you look.
Whose questions these are. Every question on this page was written for this publication. None is taken from anybody else’s question bank, and none is a claim about what any named firm asks — that is neither verifiable from here nor ours to assert. They are our own reading of which mechanism a question of this kind is testing. Information and education only.
Test yourself: five questions
Five quick questions on this part of the industry — checked entirely on your device, nothing stored or sent. Wrong answers come with explanations, and the seat pages above hold every answer. For education only.