Pass the Certified Treasury Professional (CTP) Exam with Confidence Using the Latest CTP Dumps (V9.02) – Read CTP Free Dumps (Part 1, Q1-Q40) Online

1. Which of the following are important uses of variance analysis in comparing actual cash flows with projected cash flows?

I. Identifying unanticipated changes in inventory

II. Enhancing short-term investment income

III. Validating a capital budget

IV. Identifying delays in accounts receivable collections

2. An instrument that gives the right to buy a stated number of shares of common stock at a specified price is known as:

3. A company plans to issue additional equity within the next 12 months but needs to issue debt at a low interest rate now.

Which of the following instruments would BEST meet this objective?

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

5. Which of the following instruments simplifies the paperwork connected with loans that have multiple advance features?

6. A put option on a company's stock has an exercise price of $20. On the delivery date, the stock is trading at $24 per share.

What should the investor who has paid $2 for the option do?

7. A call option for a company has an exercise price of $50. The stock is currently trading at $60.

At maturity, what should an investor who paid $3 for the option do?

8. In a typical swap transaction, two parties agree to exchange:

9. A Chicago meat processor is concerned about the volatility of pork belly prices.

Which of the following derivative products would be used to fix these prices within a given range?

10. On the basis of the following exchange rates.

Which of the following currency amounts has the greatest value in U.S. dollars?

11. Which of the following is a characteristic of giro systems used in countries in Europe?

12. Netting is used by which of the following as a cross-border payment technique?

13. In which of the following international cash management methods is title for goods transferred for intercompany sales?

14. A company is based in the United States and has an operating subsidiary in Germany.

With a stable U.S. dollar and a depreciating euro, the company's cash manager may elect to:

15. Account analysis statements should be examined for which of the following reasons?

I. To verify volumes processed

II. To determine daily cash shortages

III. To verify the accuracy of bank service charges

IV. To ensure that company-initiated transactions have occurred

16. An optimal concentration system minimizes all of the following EXCEPT:

17. A bank issues a letter of credit (L/C) and receives a request for payment under the L/C. The buyer 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 the following statements is true?

18. The KEY decision in using CCD+ and CTX formats for B2B payments is:

19. Which one of the following ties a user’s private key to a user’s public key?

20. A French company conducts business strictly within the euro zone (the EMU).

Which type of risk is of LEAST concern?

21. For a defined benefit plan,

22. A public corporation may value a defined contribution plan highly because it:

23. Which of the following is MOST LIKELY to have a significant impact on the financial condition of an organization?

24. Company XYZ is now required to make electronic payments by its suppliers. To prevent an increase in costs, the company should.

25. A company’s capital structure includes $800,000,000 in total capital, of which $200,000,000 comes from debt. The firm’s after-tax cost of debt is 6%, and its cost of equity is 12%. The marginal tax rate is currently 40%.

What is the company’s weighted average cost of capital?

26. 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?

27. XYZ Company is considering selling treasury stock but is concerned about the amount of capital it will raise given the current high volatility of the stock market.

What is the BEST strategy a firm can employ to reduce its uncertainty?

28. Company A is a large public company with annual revenue of $1.2 billion and high fixed costs. Its stock is listed on the New York Stock Exchange. Company B is a mid-sized company with annual revenue of $100 million and low fixed costs. Its stock is listed on the NASDAQ.

Which of the following statements is MOST LIKELY to be true when comparing Company A and Company B?

29. An investor concerned about taxes on dividend distributions will MOST LIKELY purchase stock on which of the following dates?

30. A large mature company with limited growth opportunities (positive NPV projects) achieved abnormally high profits this year. After paying mandatory principal, interest, and taxes, the company has $200 million in surplus cash on hand.

Assuming its investor base is most concerned with capital appreciation, which of the following is the BEST option for the company?

31. A company with constant earnings and excess cash is considering a significant stock repurchase plan.

Which of the following is MOST LIKELY to occur?

32. Optimal dividend policy is one that does all of the following EXCEPT:

33. Company XYZ has determined that its weighted average cost of capital is 12.5%. The capital structure of the company is made up of 75% equity and 25% debt. The before-tax cost of debt is 10%.

Given a tax rate of 34%, what is XYZ's cost of common stock?

34. A company hires an investment firm to fully underwrite a new stock issuance.

Which of the parties carries the MOST risk?

35. Which of the following BEST describes an advantage of a company going public?

36. With respect to the Sarbanes-Oxley Act, a company may avoid additional reporting requirements by:

37. Which of the following would be expected to happen on the ex-dividend date?

38. Regarding dividends, on which of the following dates would a company's current assets be reduced?

39. In which of the following instances does the clientele effect come into play?

40. ASC Topic 815 (FAS 133) is applicable when accounting for which of the following?