CTP Exam Practice Questions with Verified
Answers Graded A+
Over the past 3 years XYZ Company has
expanded into multiple countries and significantly Which of the following is a characteristic of giro
grown its banking relationships. The company systems used in countries in Europe?
now incurs significant expenses related to A. They Operate through their postal service
payment transaction costs and maintaining B. They are primarily used for company-to-
multiple bank connections. What shoudl the company payments
company use to cobat these rising costs. C. they do not replace checks for the payment of
A. SWIFT network bills
B. ACH Network D. They do not allow the use of direct debits and
C. CHIPS network credits - ANSWER -A
D. TARGET 2 - ANSWER -A
A company is based in the US and has an
An Instrument that gives the right to buy a stated operating subsidiary in Germany. With a stable
number of shares of common stock at a specified US dollar and depreciating Euro, the Company's
price is known as cash manager may elect to:
a. An equity warrant A. Pool excess funds int he US to offset Germany
B. a Put Option defecits
C. A zero Coupon Bond B. Implement a dollar-based multilateral netting
D. A subordinate debenture - ANSWER -A system
C. Start lending receivables from the German
subsidiary
D. establish a multi currency account in the US -
An arrangement in which a borrower makes ANSWER -C
periodic payments to a seperate custodial
account that is used to repay debt is known as a
A. sinking fund
B. Balloon payment A bank issues a letter of credit (L/C) and receives
C. Mortgage a request for payment under the L/C. The buyer
D. Zero-Coupon Bond - ANSWER -A notifies the issuing bank not to make payment
because there is a dispute over the quality of the
merchandise. However, the documents received
fully comply with the terms of the L/C. Which of
Netting is used by which of the following as a the following statements is true?
cross-border payment technique?
A. The buyer may immediately return the
A. European giro providers B. Foreign merchandise and cancel the L/C.
subsidiaries of a company C. Counterparties in a B. The bank may delay payment until
letter of credit transaction reimbursed by the buyer.
D. TARGET participants - ANSWER -D C. The bank may delay payment, provided the
seller is notified of the dispute within three
business days. D. The bank must make payment
and is entitled to immediate reimbursement from
, CTP Exam Practice Questions with Verified
Answers Graded A+
the buyer. - ANSWER - requirements by:
A. issuing shares in an IPO.
The KEY decision in using CCD+ and CTX B. providing an SSAE 16.
formats for B2B payments is: C. redeeming bond issues.
D. delisting its securities. - ANSWER -D
A. whether to keep the payment and remittance
information together or separate.
B. whether to use the Internet or an EDI spoke to Which of the following would be expected to
transmit electronic payments. happen on the ex-dividend date?
C. whether to use an EDI or a UN/EDIFACT
protocol to transfer the value electronically.
D. whether an evaluated receipts or paid-on- A. The stock is sold with the dividend attached.
production technique is being used for the B. The stock price drops.
transfer. - ANSWER - C. The stock's volume increases.
D. The stock's dividend is paid. -
ANSWER -B
which one of the following ties a user's private
key to a user's public key
Which of the following is subject to transaction
A. Digital signature exposure?
B. Digital certificate
C. digitized signature
D. digital Token - ANSWER -B 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.
For a defined benefit plan, C. A U.S. company's foreign subsidiary in Japan
AFP CTP : Practice Test has a payable denominated in Yen.
D. A Japanese company's foreign subsidiary in
the U.S. has a payable denominated in dollars. -
A. plan assets equal plan liabilities. B. plan ANSWER -B
assets can be less than plan liabilities.
C. plan assets are greater than plan equity.
D. plan assets always equal plan equity. -
ANSWER -B Which of the following is NOT a key area to
consider when establishing treasury policies?
With respect to the Sarbanes-Oxley Act, a A. Equity method investments accounting
company may avoid additional reporting B. Medium-term financing
C. Management reporting
, CTP Exam Practice Questions with Verified
Answers Graded A+
D. Foreign currency management -
ANSWER -C
A company is starting a project to redesign its
cash management information systems. What
would be an important tool in this effort?
The Governmental Accounting Standards Board
(GASB) is the authoritative standard- setting
body for which of the following? A. ERP software
B. Treasury operations manual
A. Private universities C. Cash application
B. Healthcare organizations D. Treasury workstation - ANSWER -B
C. Public works agencies
D. Publicly traded companies - ANSWER -c
The treasury management department of a
company hires a consulting firm to provide
A cash manager has determined that the break- research on how other companies in the industry
even amount for justifying a wire transfer over an have structured their treasury operations. This is
ACH for concentration of funds is $145,000. an example of which practice?
Using a wire instead of an ACH givesthe
company use of the funds two days earlier to
make overnight investments. Based on a wire A. Outsourcing
transfer cost of $10.00 and an ACH transaction B. Benchmarking
cost of $0.70, what is the company's overnight C. Re-engineering
investment interest rate on a 365-day year D. Restructuring - ANSWER -B
basis?
A. 0.95% B. 1.17% C. 2.34% D. 2.57% -
ANSWER -B A company has a line of credit and a bond
trustee agreement with a bank. To prevent a
decline in the company's bond rating from having
a negative impact on the company's line of credit,
Which of the following is NOT a drawback to the bank should have which of the following in
using ROI as a performance measure? place?
A. It may be misleading when cash flows are not A. Code of conduct
evenly distributed over time. B. Confidentiality agreement
B. It does not consider the profit generated by a C. Notional barrier
project. D. Risk profile - ANSWER -C
C. It does not include a charge for cost of capital.
D. It may lead to rejection of a positive NPV
project. - ANSWER -B
ABC Company is a national retail company and
uses XYZ Bank for its collections and payroll
Answers Graded A+
Over the past 3 years XYZ Company has
expanded into multiple countries and significantly Which of the following is a characteristic of giro
grown its banking relationships. The company systems used in countries in Europe?
now incurs significant expenses related to A. They Operate through their postal service
payment transaction costs and maintaining B. They are primarily used for company-to-
multiple bank connections. What shoudl the company payments
company use to cobat these rising costs. C. they do not replace checks for the payment of
A. SWIFT network bills
B. ACH Network D. They do not allow the use of direct debits and
C. CHIPS network credits - ANSWER -A
D. TARGET 2 - ANSWER -A
A company is based in the US and has an
An Instrument that gives the right to buy a stated operating subsidiary in Germany. With a stable
number of shares of common stock at a specified US dollar and depreciating Euro, the Company's
price is known as cash manager may elect to:
a. An equity warrant A. Pool excess funds int he US to offset Germany
B. a Put Option defecits
C. A zero Coupon Bond B. Implement a dollar-based multilateral netting
D. A subordinate debenture - ANSWER -A system
C. Start lending receivables from the German
subsidiary
D. establish a multi currency account in the US -
An arrangement in which a borrower makes ANSWER -C
periodic payments to a seperate custodial
account that is used to repay debt is known as a
A. sinking fund
B. Balloon payment A bank issues a letter of credit (L/C) and receives
C. Mortgage a request for payment under the L/C. The buyer
D. Zero-Coupon Bond - ANSWER -A notifies the issuing bank not to make payment
because there is a dispute over the quality of the
merchandise. However, the documents received
fully comply with the terms of the L/C. Which of
Netting is used by which of the following as a the following statements is true?
cross-border payment technique?
A. The buyer may immediately return the
A. European giro providers B. Foreign merchandise and cancel the L/C.
subsidiaries of a company C. Counterparties in a B. The bank may delay payment until
letter of credit transaction reimbursed by the buyer.
D. TARGET participants - ANSWER -D C. The bank may delay payment, provided the
seller is notified of the dispute within three
business days. D. The bank must make payment
and is entitled to immediate reimbursement from
, CTP Exam Practice Questions with Verified
Answers Graded A+
the buyer. - ANSWER - requirements by:
A. issuing shares in an IPO.
The KEY decision in using CCD+ and CTX B. providing an SSAE 16.
formats for B2B payments is: C. redeeming bond issues.
D. delisting its securities. - ANSWER -D
A. whether to keep the payment and remittance
information together or separate.
B. whether to use the Internet or an EDI spoke to Which of the following would be expected to
transmit electronic payments. happen on the ex-dividend date?
C. whether to use an EDI or a UN/EDIFACT
protocol to transfer the value electronically.
D. whether an evaluated receipts or paid-on- A. The stock is sold with the dividend attached.
production technique is being used for the B. The stock price drops.
transfer. - ANSWER - C. The stock's volume increases.
D. The stock's dividend is paid. -
ANSWER -B
which one of the following ties a user's private
key to a user's public key
Which of the following is subject to transaction
A. Digital signature exposure?
B. Digital certificate
C. digitized signature
D. digital Token - ANSWER -B 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.
For a defined benefit plan, C. A U.S. company's foreign subsidiary in Japan
AFP CTP : Practice Test has a payable denominated in Yen.
D. A Japanese company's foreign subsidiary in
the U.S. has a payable denominated in dollars. -
A. plan assets equal plan liabilities. B. plan ANSWER -B
assets can be less than plan liabilities.
C. plan assets are greater than plan equity.
D. plan assets always equal plan equity. -
ANSWER -B Which of the following is NOT a key area to
consider when establishing treasury policies?
With respect to the Sarbanes-Oxley Act, a A. Equity method investments accounting
company may avoid additional reporting B. Medium-term financing
C. Management reporting
, CTP Exam Practice Questions with Verified
Answers Graded A+
D. Foreign currency management -
ANSWER -C
A company is starting a project to redesign its
cash management information systems. What
would be an important tool in this effort?
The Governmental Accounting Standards Board
(GASB) is the authoritative standard- setting
body for which of the following? A. ERP software
B. Treasury operations manual
A. Private universities C. Cash application
B. Healthcare organizations D. Treasury workstation - ANSWER -B
C. Public works agencies
D. Publicly traded companies - ANSWER -c
The treasury management department of a
company hires a consulting firm to provide
A cash manager has determined that the break- research on how other companies in the industry
even amount for justifying a wire transfer over an have structured their treasury operations. This is
ACH for concentration of funds is $145,000. an example of which practice?
Using a wire instead of an ACH givesthe
company use of the funds two days earlier to
make overnight investments. Based on a wire A. Outsourcing
transfer cost of $10.00 and an ACH transaction B. Benchmarking
cost of $0.70, what is the company's overnight C. Re-engineering
investment interest rate on a 365-day year D. Restructuring - ANSWER -B
basis?
A. 0.95% B. 1.17% C. 2.34% D. 2.57% -
ANSWER -B A company has a line of credit and a bond
trustee agreement with a bank. To prevent a
decline in the company's bond rating from having
a negative impact on the company's line of credit,
Which of the following is NOT a drawback to the bank should have which of the following in
using ROI as a performance measure? place?
A. It may be misleading when cash flows are not A. Code of conduct
evenly distributed over time. B. Confidentiality agreement
B. It does not consider the profit generated by a C. Notional barrier
project. D. Risk profile - ANSWER -C
C. It does not include a charge for cost of capital.
D. It may lead to rejection of a positive NPV
project. - ANSWER -B
ABC Company is a national retail company and
uses XYZ Bank for its collections and payroll
