[2021] CTP by Certified Treasury Professional Actual Free Exam Practice Test
Free Certified Treasury Professional CTP Exam Question
NEW QUESTION 517
Which of the following is subject to transaction exposure?
- A. A U.S. company's foreign subsidiary in Japan has a receivable 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 payable denominated in Yen.
Answer: B
NEW QUESTION 518
A U.S. firm acquires a large U.K. manufacturer that generates high levels of cash flow in its local currency. The purchase is denominated in British pounds and is financed through the issuance of 10-year, 7.5% U.S. dollar bonds. The U.S. firm will rely entirely on the U.K. manufacturer's cash flows to fund the interest payments on the bonds. What derivative instrument would help the U.S. firm manage its FX exposure?
- A. Currency future
- B. Interest-rate swap
- C. Currency forward
- D. Currency swap
Answer: D
NEW QUESTION 519
The goal of investor relations is to:
- A. maintain the company's stock listing on the NYSE.
- B. ensure that a company's securities achieve a fair valuation in the marketplace.
- C. make sure all shareholders cast a vote at the annual meeting.
- D. ensure equity analysts have all available company information at any point in time.
Answer: B
NEW QUESTION 520
In order to be defined as independent, a corporate director:
- A. cannot meet regularly with executive management outside of board meetings.
- B. cannot have a material relationship with the company.
- C. cannot have been an employee with the company during the past three years.
- D. cannot have owned preferred stock shares in the company.
Answer: B
NEW QUESTION 521
The Treasurer of a company would like to establish an investment policy for the organization. One objective that should be included in the investment policy that would BEST allow the organization to limit its exposure to a particular market sector would be to:
- A. set diversification requirements.
- B. establish ratings requirements.
- C. develop an exposure horizon.
- D. perform a risk analysis.
Answer: A
NEW QUESTION 522
ABC Company has recently moved away from paper-based invoicing systems and has begun implementing e-commerce solutions. Realizing that its e-commerce implementation may have a negative impact on the float of its trading partners, ABC can do which of the following to help address this concern?
- A. Agree to a uniform data transfer protocol for all trading partners.
- B. Negotiate larger order quantities from the trading partners.
- C. Change the payment discount terms for the trading partners.
- D. Allow the trading partners to use the company's e-commerce solution.
Answer: C
NEW QUESTION 523
The yield on any short-term investment instrument is a function of the maturity or holding period, the amount paid and:
- A. the after-tax yield.
- B. the money market yield.
- C. the cash flows received.
- D. the issuing price.
Answer: C
NEW QUESTION 524
Company ABC is a restaurant chain that has enjoyed a surge in customers' dining with not much of a profitability increase in the last couple of years. Following a bad restaurant review, customer traffic deteriorated with not much change in profitability. Which of the following BEST describes the cost structure of the company?
- A. Low operating leverage
- B. Economies of scale
- C. Low financial leverage
- D. Low variable costs
Answer: A
NEW QUESTION 525
What document serves as the basic account or service authorization, empowering a representative of a business to enter into agreements for financial services?
- A. Credit agreement
- B. Signature card
- C. Service agreement
- D. Account resolution
Answer: D
NEW QUESTION 526
An evaluated receipts settlement would be MOST commonly used in an environment where:
- A. the cash conversion cycle is typically long.
- B. inventory turns over rapidly.
- C. the supplier sends an invoice.
- D. volumes involved are small.
Answer: B
NEW QUESTION 527
A construction company just received a notification from its bank advising it of an altered dollar amount on a check. This notification is MOST LIKELY the result of:
- A. reverse positive pay.
- B. the use of controlled disbursement.
- C. the use of positive pay.
- D. automated reconciliation services.
Answer: C
NEW QUESTION 528
The PRIMARY goal of treasury management is to use which of the following efficiently?
- A. Payment methods
- B. Equity
- C. Cash
- D. Net income
Answer: C
NEW QUESTION 529
A manufacturing company begins using just-in-time (JIT) inventory management. Which JIT-related payment process is MOST LIKELY to be implemented?
- A. Forward dated check
- B. Paid-on-production
- C. Point of purchase
- D. Fedwire
Answer: B
NEW QUESTION 530
DGB Inc.'s CEO and founder retired shortly after the company went public two years ago. DGB Inc. has recently struggled, and the founder has agreed to return as an independent director. What violation, if any, has occurred?
- A. No violation has occurred.
- B. The cooling-off period has not been met.
- C. Section 404 of the Sarbanes-Oxley Act has been violated.
- D. ERISA disclosure requirements have not been met.
Answer: B
NEW QUESTION 531
Company A regularly modifies its capital structure by repurchasing stock. Which one of the following is a true statement?
- A. Partial disclosure to the SEC is required for repurchases.
- B. Stock repurchases are not an attractive alternative to dividend payments.
- C. Stock repurchases do not offer tax deferral advantages over dividends.
- D. Investors may feel that management is manipulating the stock price.
Answer: D
NEW QUESTION 532
Which of the following are interest-bearing instruments?
I) Certificates of deposit
II) Treasury bills
III) Treasury notes
IV) Banker's acceptances
- A. I, III, and IV only
- B. I and III only
- C. II, III, and IV only
- D. I and IV only
Answer: B
NEW QUESTION 533
Which of the following is indicative of a consolidated operation?
- A. Intracompany loans
- B. Shared service center
- C. Offshore financing
- D. Transfer pricing agreements between subsidiaries
Answer: B
NEW QUESTION 534
A buyer receives an invoice from a supplier that offers discount terms of 3/10, net 60. What is the effective cost of discount?
- A. 15.64%
- B. 21.90%
- C. 22.58%
- D. 16.13%
Answer: C
NEW QUESTION 535
The Treasury Department of ABC Corporation has been working hard to prevent external fraud from impacting its operating bank accounts. Recently, they implemented protective services on their disbursement accounts. This morning, the treasury analyst realized that an expected sales tax payment to the state of Maryland had not occurred. The analyst knew that it had been successfully initiated yesterday. Which service used by the corporation may need to be adjusted to pay the state of Maryland?
- A. BAI reporting
- B. ACH filter
- C. Positive pay
- D. Payee verification
Answer: B
NEW QUESTION 536
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