[CTA TR] CTA Certified Treasury Analyst Exam Study
Guide
**Question 1.** Which of the following best describes a treasury that is organized as a profit center?
A) It only tracks cash balances.
B) It is evaluated on cost reductions.
C) It generates revenue through financial activities.
D) It reports directly to the CFO.
Answer: C
Explanation: A profit‑center treasury is measured by the income it creates, such as earnings from
investments or hedging.
**Question 2.** In a decentralized treasury structure, which function is most likely to be duplicated
across subsidiaries?
A) Central bank reporting
B) Cash pooling
C) Local cash management
D) Corporate risk policy
Answer: C
Explanation: Decentralized treasuries handle cash locally, leading to duplicated cash‑management
activities.
**Question 3.** Which market is primarily used for short‑term borrowing and lending of funds up to
one year?
A) Capital market
B) Money market
C) Derivatives market
D) Foreign exchange market
Answer: B
, [CTA TR] CTA Certified Treasury Analyst Exam Study
Guide
Explanation: The money market deals with instruments that have maturities of one year or less.
**Question 4.** The primary objective of a central bank’s monetary policy is to:
A) Regulate corporate dividend payouts
B) Control inflation and stabilize the currency
C) Set corporate tax rates
D) Manage corporate cash conversion cycles
Answer: B
Explanation: Central banks use monetary policy tools to maintain price stability and confidence in the
currency.
**Question 5.** Basel III primarily addresses which type of risk?
A) Operational risk
B) Market risk
C) Credit risk and liquidity risk
D) Foreign exchange risk
Answer: C
Explanation: Basel III strengthens capital, leverage, and liquidity requirements to mitigate credit and
liquidity risks.
**Question 6.** Under IFRS, a derivative that qualifies for hedge accounting must be designated as a:
A) Fair‑value hedge, cash‑flow hedge, or net‑investment hedge
B) Trading asset only
C) Debt instrument
D) Equity security
, [CTA TR] CTA Certified Treasury Analyst Exam Study
Guide
Answer: A
Explanation: IFRS 9 allows three types of hedge accounting to match the hedge with the exposure it
offsets.
**Question 7.** Which of the following is a key component of an AML program?
A) Forecasting cash flows
B) Customer due‑diligence and transaction monitoring
C) Setting dividend policy
D) Managing interest rate swaps
Answer: B
Explanation: AML programs focus on knowing customers and monitoring suspicious transactions.
**Question 8.** The “Dealer’s Code of Conduct” primarily governs:
A) Treasury accounting standards
B) Ethical behavior of traders and dealers in financial markets
C) Internal audit procedures
D) Corporate tax compliance
Answer: B
Explanation: The code sets standards for honesty, integrity, and fairness in dealing with market
participants.
**Question 9.** Which cash‑flow forecasting horizon is most appropriate for daily cash positioning?
A) One‑year strategic forecast
B) Monthly rolling forecast
C) Daily or hourly forecast
, [CTA TR] CTA Certified Treasury Analyst Exam Study
Guide
D) Quarterly budget forecast
Answer: C
Explanation: Daily forecasts provide the granularity needed for immediate cash‑management decisions.
**Question 10.** Variance analysis in cash‑flow forecasting compares:
A) Forecasted cash flow versus actual cash flow
B) Budgeted revenue versus actual revenue
C) Short‑term interest rates versus long‑term rates
D) Working capital turnover versus inventory turnover
Answer: A
Explanation: Variance analysis measures the difference between projected and realized cash
movements.
**Question 11.** The cash conversion cycle (CCC) is calculated as:
A) Days inventory + Days receivable – Days payable
B) Days inventory – Days receivable + Days payable
C) Days receivable + Days payable – Days inventory
D) Days inventory + Days payable – Days receivable
Answer: A
Explanation: CCC measures the time cash is tied up in the operating cycle.
**Question 12.** Which strategy speeds up accounts receivable collection?
A) Extending payment terms to customers
B) Offering early‑payment discounts
Guide
**Question 1.** Which of the following best describes a treasury that is organized as a profit center?
A) It only tracks cash balances.
B) It is evaluated on cost reductions.
C) It generates revenue through financial activities.
D) It reports directly to the CFO.
Answer: C
Explanation: A profit‑center treasury is measured by the income it creates, such as earnings from
investments or hedging.
**Question 2.** In a decentralized treasury structure, which function is most likely to be duplicated
across subsidiaries?
A) Central bank reporting
B) Cash pooling
C) Local cash management
D) Corporate risk policy
Answer: C
Explanation: Decentralized treasuries handle cash locally, leading to duplicated cash‑management
activities.
**Question 3.** Which market is primarily used for short‑term borrowing and lending of funds up to
one year?
A) Capital market
B) Money market
C) Derivatives market
D) Foreign exchange market
Answer: B
, [CTA TR] CTA Certified Treasury Analyst Exam Study
Guide
Explanation: The money market deals with instruments that have maturities of one year or less.
**Question 4.** The primary objective of a central bank’s monetary policy is to:
A) Regulate corporate dividend payouts
B) Control inflation and stabilize the currency
C) Set corporate tax rates
D) Manage corporate cash conversion cycles
Answer: B
Explanation: Central banks use monetary policy tools to maintain price stability and confidence in the
currency.
**Question 5.** Basel III primarily addresses which type of risk?
A) Operational risk
B) Market risk
C) Credit risk and liquidity risk
D) Foreign exchange risk
Answer: C
Explanation: Basel III strengthens capital, leverage, and liquidity requirements to mitigate credit and
liquidity risks.
**Question 6.** Under IFRS, a derivative that qualifies for hedge accounting must be designated as a:
A) Fair‑value hedge, cash‑flow hedge, or net‑investment hedge
B) Trading asset only
C) Debt instrument
D) Equity security
, [CTA TR] CTA Certified Treasury Analyst Exam Study
Guide
Answer: A
Explanation: IFRS 9 allows three types of hedge accounting to match the hedge with the exposure it
offsets.
**Question 7.** Which of the following is a key component of an AML program?
A) Forecasting cash flows
B) Customer due‑diligence and transaction monitoring
C) Setting dividend policy
D) Managing interest rate swaps
Answer: B
Explanation: AML programs focus on knowing customers and monitoring suspicious transactions.
**Question 8.** The “Dealer’s Code of Conduct” primarily governs:
A) Treasury accounting standards
B) Ethical behavior of traders and dealers in financial markets
C) Internal audit procedures
D) Corporate tax compliance
Answer: B
Explanation: The code sets standards for honesty, integrity, and fairness in dealing with market
participants.
**Question 9.** Which cash‑flow forecasting horizon is most appropriate for daily cash positioning?
A) One‑year strategic forecast
B) Monthly rolling forecast
C) Daily or hourly forecast
, [CTA TR] CTA Certified Treasury Analyst Exam Study
Guide
D) Quarterly budget forecast
Answer: C
Explanation: Daily forecasts provide the granularity needed for immediate cash‑management decisions.
**Question 10.** Variance analysis in cash‑flow forecasting compares:
A) Forecasted cash flow versus actual cash flow
B) Budgeted revenue versus actual revenue
C) Short‑term interest rates versus long‑term rates
D) Working capital turnover versus inventory turnover
Answer: A
Explanation: Variance analysis measures the difference between projected and realized cash
movements.
**Question 11.** The cash conversion cycle (CCC) is calculated as:
A) Days inventory + Days receivable – Days payable
B) Days inventory – Days receivable + Days payable
C) Days receivable + Days payable – Days inventory
D) Days inventory + Days payable – Days receivable
Answer: A
Explanation: CCC measures the time cash is tied up in the operating cycle.
**Question 12.** Which strategy speeds up accounts receivable collection?
A) Extending payment terms to customers
B) Offering early‑payment discounts
