Updated Aug-2022 Test Engine to Practice Test for CTP Exam Questions and Answers!

Certified Treasury Professional Certification Sample Questions and Practice Exam

NEW QUESTION 526
An arrangement in which a borrower makes periodic payments to a separate custodial account that is used to repay debt is known as a:

• A. zero-coupon bond
• B. balloon payment
• C. sinking fund
• D. mortgage

Answer: C

 

NEW QUESTION 527
The stock of a manufacturing company is priced so that its expected rate of return is below its required rate, as calculated by the Capital Asset Pricing Model (CAPM). Which of the following will occur in an efficient capital market?

• A. Selling pressure for the firm's stock will drive the price up.
• B. Buying pressure for the firm's stock will drive the price up.
• C. Selling pressure for the firm's stock will drive the price down.
• D. Buying pressure for the firm's stock will drive the price down.

Answer: C

 

NEW QUESTION 528
Company ABC experienced a loss in the past when an employee in the treasury department was able to transfer $1.5 million to a personal account offshore. The company is working with a security agent to prevent this from happening in the future. ABC also accepts a large number of checks as payment. The agent has suggested upgrades to ABC's payment process. What step should be taken to help mitigate this type of risk in the future?

• A. Implement dual approval.
• B. Set up international bank security.
• C. Implement data security standards.
• D. Securely store check stock.

Answer: A

 

NEW QUESTION 529
Which of the following will MOST LIKELY be affected when a company changes its terms from net 30 to 2/10 net 30?

• A. Collection expenses
• B. Sales revenue
• C. Credit evaluation expenses
• D. Bad debt charge-offs

Answer: B

 

NEW QUESTION 530
A company offers credit terms of net 40, with an opportunity cost of 12% to a customer. What discount would have to be offered for the customer to be indifferent between paying on Day 40 and paying with the discount on Day 10?

• A. 1.6%
• B. 1.0%
• C. 2.0%
• D. 1.3%

Answer: B

 

NEW QUESTION 531
While revising the investment policy, the CFO performs a sensitivity analysis for the company's cash flow from investments, and identifies that increasing the maximum dollar value for bond purchases will improve returns by 10% on average, all other variables being equal. What issue will the CFO now need to address in the investment policy?

• A. Exception management
• B. Internal and external controls
• C. Performance management and reporting
• D. Valuation of investments

Answer: C

 

NEW QUESTION 532
Which of the following are basic security issues to be considered in evaluating a treasury management system?
I. Data recovery
II. Anti-virus protection
III. Database access controls
IV.
Data integration

• A. I and II
• B. I, II, and III
• C. I, III, and IV
• D. III and IV

Answer: B

 

NEW QUESTION 533
The treasury management department of a company hires a consulting firm to provide research on how other companies in the industry have structured their treasury operations. This is an example of which practice?

• A. Outsourcing
• B. Restructuring
• C. Benchmarking
• D. Re-engineering

Answer: C

 

NEW QUESTION 534
In a private label financing arrangement, the seller does which of the following?

• A. Commits funds to finance accounts receivable.
• B. Operates its own credit function as a subsidiary.
• C. Receives the full face value of the sale in most cases.
• D. Loses authority to decide which customers receive credit.

Answer: D

 

NEW QUESTION 535
If a company has $126 million in debt at an average cost of 7% and $234 million in equity at a cost of 11%, what is its weighted average cost of capital, assuming a marginal tax rate of 35% and a risk-adjusted rate of 13%?

• A. 8.7%
• B. 10.9%
• C. 10.0%
• D. 9.6%

Answer: A

 

NEW QUESTION 536
The Treasury Manager of a chain of department stores wants to develop a medium-term forecast.
Management plans to open two new stores, and anticipates same-store sales to increase by 15%.
Which of the following items can be predicted with the highest degree of certainty?

• A. Taxes on stock options
• B. New product sales
• C. Fixed bond interest payment
• D. Refranchising proceeds

Answer: C

 

NEW QUESTION 537
A multinational company (MNC) that operates a shared service center charges its foreign subsidiaries a management fee. This management fee may need to be:

• A. manipulated to locate profits in low-tax countries.
• B. negotiated with the host government.
• C. paid through a third-party intermediary.
• D. significantly taxed by the host government.

Answer: B

 

NEW QUESTION 538
What activity should the Treasurer be most interested in if core treasury functions were to be compared within the industry or cross-industry for the purpose of identifying "best practices"?

• A. Outsourcing
• B. Six Sigma
• C. Benchmarking
• D. Re-engineering

Answer: C

 

NEW QUESTION 539
Which of the following is subject to transaction exposure?

• A. A U.S. company's foreign subsidiary in Japan has a payable denominated in Yen.
• B. A Japanese company's foreign subsidiary in the U.S. has a receivable denominated in Yen.
• C. A Japanese company's foreign subsidiary in the U.S. has a payable denominated in dollars.
• D. A U.S. company's foreign subsidiary in Japan has a receivable denominated in Yen.

Answer: B

 

NEW QUESTION 540
LST Company is a publicly traded company with $120 million in sales. Historically, LST does not extend credit to customers beyond net 45 terms. To help promote sale of a new product introduced into the market this year, LST offered financing terms to customers purchasing the new product. As a result, sales increased by 15% from the prior year and accounts receivable increased by 5%. At the end of their fiscal year LST had a $15 million sale to a new customer that was recorded as a note receivable. LST recognizes revenue when goods leave the facility. During the financial audit the auditors discovered that the customer did not receive the product until three days after the year-end. Under GAAP accounting, the auditors would MOST LIKELY render a(n):

• A. unqualified opinion because the product was shipped before the fiscal year-end.
• B. adverse opinion because the product not received before the fiscal year-end.
• C. disclaimed opinion because the product was shipped before the fiscal year-end.
• D. qualified opinion because the product was not received before the fiscal year-end.

Answer: A

 

NEW QUESTION 541
Cash management services commonly used outside the United States include which of the following?
I) Interest-bearing deposit accounts
II) Controlled disbursement systems
III) Pooling of bank accounts

• A. I and III only
• B. I and II only
• C. II and III only
• D. I, II, and III

Answer: A

 

NEW QUESTION 542
A company has a $2 million line of credit requiring a 5% compensating balance on usage. For the next year, the company projects a usage of 75% and a 10.375% interest rate. If the balance requirement is eliminated, by how many basis points will the company's effective interest rate be reduced?

• A. 0
• B. 1
• C. 2
• D. 3

Answer: A

 

NEW QUESTION 543
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Difficulty in Writing AFP CTP: Certified Treasury Professional Exam

CTP Certified Treasury Professional is the basic document for the categorization of the Specific Financial Coordinator (CTP). It outlines the necessary skills of classified professions. A comprehensive testimony of the work and the environment of personal financial advisors has led to this article, referred to below as the Expertise Profile. The review also known as task assessment or work enables CSI to evaluate and verify, and recognize, what CTP certification holders perform. This Competence Profile was developed in 2011 with substantial input from many stakeholders and the CTP categorization populations to validate the information in full. It is anticipated that the next assessment will continue essentially for the following five years.

The Competency Profile provides many consumers that may and should utilize the information for their particular purposes. CSI uses its Competency Account to meet the academic prerequisite for CTP classification and to set the requirements for first-year work, annual continuing and learning experience to meet the classification requirements as the defining source of what a personal monetary organizer can and does in the method. It also provides the evaluation criteria for the categorization of AFP CTP exam dumps the Applied Financial Preparation (AFP) Accreditation Examination (AFP) and is the source for the evaluation plans listed in Section B of this document. CTP classification candidates should use the profile of expertise to understand the extent of the abilities, knowledge and skills required to perform and to evaluate the classification for their enthusiasm and relevance to their work and profession. The standards for the AFP Certification Exams are based on evaluations of those assessments and the evaluation plans included in section B only of the material in the Competence Account. Candidates should also try to assess their individual professional experience as against the standards prescribed out in the Department Profile. Certification owners should use the Knowledge Profile for the evaluation of their continuous education and learning needs, but, most significantly, it offers classification owners the opportunity to demonstrate their value, capacity, expertise, and abilities to employers and also to customers.

 

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