CTP Exam Questions - Real & Updated Questions PDF
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NEW QUESTION 16
Which of the following is subject to transaction exposure?
- A. A Japanese company's foreign subsidiary in the U.S. has a payable denominated in dollars.
- B. A Japanese company's foreign subsidiary in the U.S. has a receivable denominated in Yen.
- C. A U.S. company's foreign subsidiary in Japan has a receivable denominated in Yen.
- D. A U.S. company's foreign subsidiary in Japan has a payable denominated in Yen.
Answer: B
NEW QUESTION 17
A treasurer has been advised that his privately held company has just lost its largest customer, which will have a significant impact on earnings. The treasurer applies an aggressive working capital strategy. Presently, the yield curve is upward sloping. Given this information, the treasurer should ensure that the company has:
- A. short-term committed lines.
- B. long-term non-committed lines.
- C. short-term non-committed lines.
- D. long-term committed lines.
Answer: A
NEW QUESTION 18
Which of the following is an important component of corporate governance?
- A. The level of compliance with GAAP
- B. The existence of a large number of institutional investors
- C. The activities of independent outside auditors
- D. The existence of a matrix management structure
Answer: C
NEW QUESTION 19
XYZ Bank would like to conduct some foreign exchange transactions with JKL Bank. JKL isn't the most liquid and could have some credit risk. XYZ Bank should suggest which of the following in order to eliminate risk?
- A. Straight-through processing
- B. Continuous Linked Settlement
- C. Pre-authorized draft
- D. Forward rate contract
Answer: B
NEW QUESTION 20
Company X, a US based multi-national, is exploring the option of locating a subsidiary in another country where there has been some historical risk of expropriation of local assets of foreign corporations. Therefore, as part of the risk assessment process the company must specifically quantify the:
- A. political risk.
- B. property risk.
- C. physical security risk.
- D. financial institution risk.
Answer: A
NEW QUESTION 21
Which of the following is NOT a short-term cash forecasting technique?
- A. Receipts and disbursements forecast
- B. Distribution forecast
- C. Accounts receivable balance pattern forecast
- D. Income statement forecast
Answer: D
NEW QUESTION 22
Company ABC has expanded its banking relationships due to international growth. ABC cannot figure out why its collection float amongst its international customers is longer than its domestic customers. Additionally, ABC is incurring significant costs related to the receipt and processing of these customer payments. ABC is MOST LIKELY experiencing issues related to:
- A. paper-based international payments.
- B. international wire transfer.
- C. international bank consolidations.
- D. SEPA credit transfer.
Answer: A
NEW QUESTION 23 
Which currency will sell at the greatest discount in the forward market against the U.S. dollar?
- A. Euro
- B. Japanese yen
- C. Mexican peso
- D. Canadian dollar
Answer: A
NEW QUESTION 24
A publicly held U.S. company has reported at the beginning of the year that it expects to
increase shareholder value by 5%. The current expectations are for interest rates to remain steady with a decline in fourth quarter. Treasury policy requires that investments be 90 days or less and investment grade. How should the company invest excess cash to support this goal?
- A. High-yield bonds
- B. BB rated bond
- C. Commercial paper
- D. 16-week U.S. Treasury bill
Answer: C
NEW QUESTION 25
Company ABC has undergone substantial system enhancements in order to take advantage of B2B efficiencies. To encourage its trading partners, ABC has offered a 1.5% discount to those who allow ABC to debit their bank account electronically on the day the product is delivered. The greater number of trading partners who agree to this arrangement, the greater improvement Company ABC will see in its:
- A. cash flow to total debt.
- B. cash turnover ratio.
- C. days' inventory.
- D. days' payables.
Answer: B
NEW QUESTION 26
Which of the following will directly increase a company's cost in a fee-only bank relationship?
- A. An increase in the ECR
- B. An increase in transaction activity
- C. A decrease in the reserve requirement
- D. A decrease in ledger balances
Answer: B
NEW QUESTION 27
Disbursement float includes which of the following three float time intervals?
- A. Mail, invoicing, and clearing float
- B. Mail, processing, and availability float
- C. Mail, processing, and clearing float
- D. Mail, invoicing, and availability float
Answer: C
NEW QUESTION 28
In this situation, the net earnings credit amount for the month would show:
- A. a deficiency of $1,725.
- B. an excess of $1,850.
- C. an excess of $2,100.
- D. an excess of $1,425.
Answer: D
NEW QUESTION 29
XYZ Company is a publicly held manufacturing company that has decided to branch out into the international market. Five million dollars is needed to set up management and hire the factory workers, $2 million for various government certifications in order to begin business in Poland, and $1 million for miscellaneous expenses. While looking for funding, XYZ found that local banks in Poland were not willing to provide financing without which of the following?
- A. A Full Guarantee
- B. A Certified Workers Compensation Policy
- C. A Comfort Letter
- D. A Personal Guarantee from the CEO
Answer: A
NEW QUESTION 30
Under a loan agreement, which of the following could be an event of default?
I) Nonpayment of interest when due
II) A material adverse change in the condition of the borrower
III) A debt-to-equity ratio above the limit specified
IV) Shortening the cure period by half
- A. I and II only
- B. II and III only
- C. I and IV only
- D. I, II, and III only
Answer: D
NEW QUESTION 31
A disclaimer opinion is required on a set of financial statements when:
- A. the auditor is not independent.
- B. material deviations from GAAP occur.
- C. the financial statements may be misleading.
- D. the financial statements are fairly stated.
Answer: A
NEW QUESTION 32
From a consumer's perspective, all of the following are true of both debit cards and credit cards EXCEPT:
- A. merchants receive availability within three business days.
- B. transactions are posted to bank accounts as withdrawals.
- C. transactions may require authorization from the card issuer.
- D. transactions can be conducted at automated teller machines.
Answer: B
NEW QUESTION 33
A bank uses all of the following to determine whether a company's balances are sufficient to compensate for services EXCEPT:
- A. earnings credit rates.
- B. collected balances.
- C. ledger balances.
- D. reserve requirement.
Answer: C
NEW QUESTION 34
A large U.S. based multinational corporation favors use of intra-company loans to repatriate funds from its foreign subsidiaries in order to take advantage of the favorable tax treatment of loans. In those countries which restrict repayment of intra-company loans the corporation may need to:
- A. hire a multinational bank to act as an intermediary.
- B. negotiate repayment with the host government.
- C. pay licensing fees to the host government.
- D. conduct the repayment at "arm's length".
Answer: A
NEW QUESTION 35
A U.S. company has a secured committed line of credit of $5 million. The company successfully transmitted a $5.5 million wire transfer instruction out to the bank. The bank contacted the company and informed it that the wire transfer would not be processed. What is the MOST LIKELY reason the bank gave the company?
- A. The bank imposed a guidance line of credit on the account.
- B. The company overdraft facility was sufficient.
- C. The bank refused funding on the company's discretionary line of credit.
- D. The company reached its maximum limit on the committed line.
Answer: A
NEW QUESTION 36
Which of the following capital budgeting methods ignores the time value of money?
- A. Profitability Index
- B. Payback period
- C. Internal Rate of Return
- D. Net Present Value
Answer: B
NEW QUESTION 37
A company in the market to purchase a treasury management system (TMS) has issued a request for proposal to evaluate various vendors. One of the evaluation factors focuses on the long-term viability of the vendor. The company may have to choose between an untested new vendor with a superior product and an established vendor with an incomplete product suite. This dimension of the RFP is measuring what type of risk?
- A. Reputational risk
- B. Technology risk
- C. Supplier risk
- D. Financial risk
Answer: C
NEW QUESTION 38
A nationwide retailer has been making EFT payments to its suppliers for several years. It will expand its processes to include consumer payments in its EFT initiative. Which of the following will support this initiative at the point-of-sale?
- A. Consumer-to-business
- B. Check truncation
- C. Paid-on-production
- D. Prearranged payment
Answer: B
NEW QUESTION 39
Examples of traditional factors used in making a credit decision include which of the following?
I) Capacity
II) Capital
III) Compliance
IV) Character
- A. I and III only
- B. I, II, and IV only
- C. IV only
- D. I, II, III, and IV
Answer: B
NEW QUESTION 40
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