Ace the AFP Exam 2026 – Boost Your Financial Wizardry!

A decentralized treasury structure is characterized by fully autonomous subsidiaries managing their treasury operations independently. In this approach, each subsidiary has the authority to make financial decisions that best suit its unique market conditions and operational needs. This allows for greater flexibility and responsiveness to local financial environments, as well as the opportunity to optimize cash management and financing strategies based on specific regional demands.

In contrast, a centralized treasury structure involves managing treasury functions from a single corporate headquarters, where decisions and operations are controlled centrally. Options that describe centralized structures focus on consolidating control and operations, hindering the localized decision-making advantages that a decentralized approach provides. Therefore, option B stands out as the correct choice, highlighting the independence and discretion afforded to subsidiaries within a decentralized treasury framework.