Ace the 2025 Certified Treasury Pro Test – Cash In on Your Future Brilliance!

To determine the break-even point for interest earned on overnight investments to offset the cost of a wire transfer, you'll need to consider the specific fees associated with the wire transfer and the interest rate available on the overnight investments. The break-even point is the amount of money that must be invested overnight in order for the interest earned to equal the cost of the wire transfer fees.

In this scenario, the correct answer suggests that the amount of $584,000 must be invested overnight to generate sufficient interest, assuming the interest rate on those investments is low. The rationale here is that if the interest earned from the overnight investment equals the cost of the wire transfer, you have reached the break-even point.

This calculation typically involves taking the wire transfer fee and dividing it by the expected annual interest rate to find out how much capital is needed to generate enough interest to cover that fee. In situations where wire transfer fees are relatively high, the required investment amount to achieve break-even can be substantial, which aligns with the figure of $584,000.

The context of the question likely concerns the relationship between transaction costs and investment earnings, which are crucial for effective financial decision-making in treasury operations. Understanding this concept helps treasury professionals weigh the costs of liquidity against potential earnings from investments.