CTP Exam Questions

- (Topic 3) XYZ Inc. has limited cash flow, total liabilities to total assets greater than 52%, and a high WACC. To help meet the goal of lowering their WACC, the company plans to...

- (Topic 3) Given the above information, if the risk manager adds a tank at its second facility, what loss control technique is being used?

- (Topic 3) The treasury manager of an auto-parts manufacturer has noticed that checks were sent to a foreign individual not on the approved vendor list. The payables manager has e...

- (Topic 3) Amalgamated Binding Consolidators takes 20 days to convert its raw materials to finished goods, 5 days to sell it, and 15 days to collect its credit sales. What is the...

- (Topic 3) When company profits are high, what is the MOST LIKELY way management will prefer to finance growth?

- (Topic 3) On June 1, a manufacturing company experienced a system failure that lasted more than 24 hours. The company did not have any contingency plans in place and as a result...

- (Topic 3) The board of directors announces an increase in its dividend from $0.11/share to $0.15/share. Over the next two quarters, management notices that its investor base has...

- (Topic 3) What is this firm's residual income? Revenues: $110,000 Expenses (including COGS and all taxes): $87,000 Internal rate of return: 8.5% Capital Investment: $55,000 ROI:...

- (Topic 3) What is the premium (price) for an oil contract, if the following conditions are present? LIBOR rate of 5% Out of the money cost of $3 Strike price is $4 In the money p...

- (Topic 3) When a company announces a significant and unexpected dividend increase, it signals to the market that management expects:

- (Topic 3) JMW Company processes its consumer payments using a lockbox provider. On average 35% of its remittance advices contain encoding errors. JMW Company's cost for the lockb...

- (Topic 3) Making payments through electronic payments networks can be a part of a treasury management system's functionality, but it is subject to numerous constraints. Which of...

- (Topic 3) A bank is evaluating the credit risk for a company seeking to optimize costs and originate a high volume of outgoing ACH payments. What is the BEST provision the bank s...

- (Topic 3) ABC Corporation receives images of paid check exception items from its bank and reviews them daily. What action should be taken on an item where the payee on the image...

- (Topic 3) A company has decided to manage its short-term investment portfolio in-house. It is looking for enhanced capital gains as well as the ability to sell the instruments on...

- (Topic 3) A corporate compliance officer is drafting an agenda for an ethics training session. Which of the following would NOT be an appropriate item to include?

- (Topic 3) A dealer is selling securities to a client. What is the yield/price at which the dealer will sell?

- (Topic 3) Private companies usually go public by making an initial public offering. What is the term for offering subsequent shares in the market?

- (Topic 3) EDI infrastructure includes which of the following four PRIMARY components?

- (Topic 3) 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...

- (Topic 3) Company XYZ is conservative when investing in their short-term portfolio. XYZ is looking to add the following money market instruments in their own country: a reverse r...

- (Topic 3) A manager has prepared an analysis of five investment alternatives. Prior to selecting which alternative to invest funds in, the manager calculated the anticipated retu...

- (Topic 3) One example of increased use of electronic payments for retail businesses to convert customer checks to cash at the counter more quickly is:

- (Topic 3) A company has six fraudulent checks clear its primary disbursement account for a total of $7,652. The bank agrees to split the loss with the company to maintain a good...

- (Topic 3) The yield curve is inverted. A creditworthy firm considering alternative debt maturities would MOST LIKELY:

- (Topic 3) Using a digital certificate when accessing a financial services provider is one way to reduce what kind of risk?

- (Topic 3) 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 focu...

- (Topic 3) A treasury manager at a multinational manufacturing corporation assigned a team of analysts to re-engineer the company's FX exposure management program. Which of the fo...

- (Topic 3) An institutional investor has purchased an investment that provides a fixed rate of return with some potential for delays in payments. The return is 70% tax deductible...

- (Topic 3) An art history museum has recently finished renovating its new location. Before the move, the treasurer considers purchasing additional insurance to protect the art dur...

- (Topic 3) A company is evaluating its employee healthcare expense and payroll applications. If the company wishes to provide maximum convenience to its employees, which payment m...

- (Topic 3) Money market funds are able to obtain very competitive trading terms because:

- (Topic 3) Equity section of Fisher, Inc. Financial Statement If an investor paid $1,400.00 (excluding fees) for 75 shares of common stock, what was the market value of Fisher, In...

- (Topic 3) Which of the following would be true for a company with high operating leverage?

- (Topic 3) Company ABC, with a current debt rating of BBB- from Standard & Poor's, is negotiating a new revolving credit agreement with its lenders. The company anticipates closin...

- (Topic 3) Which of the following is a tool that companies use to obtain a quantitative rating of a financial institution's level of service?

- (Topic 3) A-Plus Company has made arrangements for a new insurance broker to provide products to its employees. Historically, A-Plus Company's employees made insurance payments v...

- (Topic 3) A retail brokerage firm is MOST like which one of the following types of financial institutions?

- (Topic 3) An asset-based lender has decided to provide a loan to a company. In order to perfect its security interest in the assets used as collateral with the potential borrower...

- (Topic 3) After several internal discussions about treasury management systems (TMSes), ABC Company has determined that it has no need for customization but that it does want a b...

- (Topic 3) An analyst at XYZ Company was assigned with determining if the company should start to use a lockbox provider for its retail payments. The analyst determined that the c...

- (Topic 3) Company XYZ is in its first year of operations. The company culture is conservative, and it has $500 million to invest in short-term investments. The company has a grow...

- (Topic 3) For ABC Company in the last fiscal year, the operating profit was $8,500,000, the tax rate was 33%, the total capital was $75,000,000, and the WACC was 9.7%. What was t...

- (Topic 3) $7,652. The bank agrees to split the loss with the company to maintain a good relationship. As a condition of sharing the expense, the bank requires the company to esta...

- (Topic 3) The yield on any short-term investment instrument is a function of the maturity or holding period, the amount paid and:

- (Topic 3) The controller is developing a financial plan that includes an operating budget and a financial budget. Which of the following statements is true?

- (Topic 3) A small regional bank is losing market share in fiduciary services and the CEO has decided to scale back the trust department. Which of the following is considered a co...

- (Topic 3) Which of the following is generally NOT a benefit of financial risk management?

- (Topic 3) ABC Company, a leading provider of office supplies, has successfully implemented EDI based on a request from one of its customers. ABC will not only benefit from the st...

- (Topic 3) Securities sold by companies in an initial public offering (IPO) arE.