CTP Comprehensive Questions and
Correct Answers Verified Latest
Updated 2026-2027 GRADED A+
A company is comparing two potential three-year investments at a discount rate of 12%.
Project A costs $3,500 but should generate a return of $5,000 at the end of the third year,
and Project B costs $5,000 but should generate a return of $7,800 at the end of the third
year. What is the net present value (NPV) for each project? - CORRECT ANSWERS-
Project A: $58.97; Project B: $552.00
Controlled disbursement for a company is important because it - CORRECT ANSWERS-
assists in determining the day's funding requirements.
The Depository Trust and Clearing Corporation (DTCC) - CORRECT ANSWERS-brings
efficiency by netting transactions between brokers, dealers, mutual funds, insurance
companies and other large investors.
A company has the option to lease or buy. If it leases, it does not intend to keep the asset
after the lease expires. If it buys, it intends to sell the asset after it is fully depreciated. The
company should consider ALL of the following when making this calculation EXCEPT -
CORRECT ANSWERS-length of the lease compared to its estimated useful life
Which of the following foreign currency transactions will yield a profit when the price of the
underlying foreign currency rises above the strike price? - CORRECT ANSWERS-A buyer
of a call option on the currency
Which of the following reflects a win-win approach to improving cash flow? - CORRECT
ANSWERS-Focus on the beginning of the operating cycle (purchase of resources through
sale of goods or services)
If an investment bank offers both underwriting/distribution functions and investment
advisory or management functions, which situation would be acceptable under U.S.
Securities and Exchange regulations and ethics guidelines with regard to material non-
public information (MNPI)? - CORRECT ANSWERS-"Bringing someone over the wall" to
provide value to underwriting, who does not comment on MNPI until it has been made
public.
,Labor is the greatest variable cost for a particular business. Equipment is the greatest fixed
cost for the business. Which of the following should the business do if they wish their profits
to expand more rapidly, assuming the company is currently profitable? What will happen to
the break-even level of output for the business if they make the change? - CORRECT
ANSWERS-Invest in equipment to reduce labor costs; the break-even level will increase.
Which of the following correctly indicates how the issue price of common stock shares
would be valued when a corporation makes a follow-on issue? - CORRECT ANSWERS-
The market price of existing shares is used as guidance
Which of the following would help a treasurer sort through the vast data from a treasury
management system (TMS), starting at a high level and showing just the information
relevant to the treasurer's duties? - CORRECT ANSWERS-Dashboard
Transit RoutingEndpoint LocationDeposit DeadlineAvailability08xxxxxxxSt. Louis, MO1
p.m.1 day
Bank XYZ has a published ledger cutoff time of 3:00 p.m. Company ABC deposits a check
drawn on a St. Louis bank on Tuesday at 2:00 p.m. Based on the availability schedule
above, on which of the following days will Company ABC receive availability of the funds? -
CORRECT ANSWERS-Thursday
Which of the following oil call option contracts would be MOST LIKELY to have the
smallest speculative premium? - CORRECT ANSWERS-European option with a strike
price of $90 per barrel, in the money by $5
ABC Company has incurred costs due to its bank repeatedly missing the controlled
disbursement reporting deadline. To which of the following would the company's cash
manager refer? - CORRECT ANSWERS-Service level agreement
When developing formal policies and procedures for treasury operational activities, an
organization determines the primary objective relating to each treasury function (e.g.,
investment management, foreign exchange [FX] risk management, etc.) and then
communicates this information - CORRECT ANSWERS-throughout the entire
organization.
What method may be more problematic to use in the future because banks may no longer
be allowed to net loans against deposition positions as per Basel III? - CORRECT
ANSWERS-Notional pooling
Which of the following is a reason that banks may favor fee compensation over balance
compensation? - CORRECT ANSWERS-Deposit balances increase liabilities on the
balance sheet.
Which of the following eliminates settlement risk? - CORRECT ANSWERS-Continuous
Linked Settlement (CLS)
,A company wants to remove some debt from its balance sheet without actually retiring the
debt issue. Therefore, they buy U.S. government securities and place them in escrow to
guarantee the debt. Which of the following is this company doing? - CORRECT
ANSWERS-Defeasance of debt
Which of the following is a type of fidelity risk? - CORRECT ANSWERS-Employee stealing
a van load of raw materials
Which of the following would serve as an example of a predictable cash flow among the
various degrees of certainty that can be assigned? - CORRECT ANSWERS-Payroll
disbursements
Match each of the following elements of a time series forecast with its example.
Elements:
I. Trend
II. Seasonal pattern
III. Cyclical pattern
IV. Random movement
Examples:
A. An earthquake breaks an oil pipeline, raising gas prices
B. There is a weak increase in prices of fish during February and March
C. Cereal prices rise slowly due to increasing wheat prices
D. Sales are weak at the beginning of each month and strong at month's end - CORRECT
ANSWERS-I: C, II: B, III: D, IV: A
A firm has increased its return on assets (ROA) from the prior period. The firm's return on
sales increased significantly and its total asset turnover decreased a fair amount over the
period. Which of the following is the correct conclusion from these results? - CORRECT
ANSWERS-The firm should look for areas where their investment in assets could be
reduced to increase measures such as cash turnover.
A market participant believes that the price of oil will fall and consequently borrows oil
commodities from a dealer and sells the commodities. After the price eventually does fall,
the participant buys oil commodities on the open market and returns them to the broker
who made the original loan. Which of the following describes this situation? - CORRECT
ANSWERS-A speculator taking a short position
A Chinese investor invests in U.S. Treasury bills. If the Chinese renminbi (RMB)
appreciates during the holding period against the U.S. dollar (USD), this investment -
CORRECT ANSWERS-declines in value but default risk remains unchanged.
Which of the following is true of dealing with insurance providers and/or insurer ratings? -
CORRECT ANSWERS-A.M. Best Company ratings on financial strength and on
indebtedness are independent of one another
, On January 10, the following quotes are provided for $1,000,000 U.S. Treasury bills:
MATURITY DATEDAYS TO MATURITYBID DISCOUNTASK DISCOUNTASK YIELD
PERCENT
February 14 35 1.25 1.24 1.26
February 21 421.25 1.24 1.26
February 28 49 1.24 1.23 1.25
If an investor purchases a T-bill maturing on February 14, what is the holding period yield of
this investment? - CORRECT ANSWERS-0.1207%
A company has an agreement with a bondholder that prevents it from selling several of its
coal-fired power plants. However, recent regulatory changes have made these plants less
profitable and the value of the firm is falling. Which of the following is this agreement
called? - CORRECT ANSWERS-Indenture
Company A's long-term debt to capital ratio is 32.2 and its fixed-charge coverage ratio is
0.14, while Company B's corresponding ratios are 41.5 and 0.20. Each company issues
commercial paper (CP). Which company would have a stronger ability to repay its CP
obligation? - CORRECT ANSWERS-Company B, because B's relatively higher fixed-
charge coverage ratio indicates a stronger ability to cover obligations.
When the yen has a higher interest rate than the U.S. dollar, which of the following is true of
the foreign exchange (FX) rate? - CORRECT ANSWERS-The yen will sell at a discount in
the forward market against the U.S. dollar
An Italian company's bank has branches in each of the European countries in which the
company does business, but the bank does not provide full domestic banking in these
other countries. Therefore, the company must use local banks in these countries for
domestic transactions and transfer of surplus funds to the primary bank. If the primary
bank notionally collects balances together from the various sources, which of the following
BEST describes what this company is using? - CORRECT ANSWERS-Bank overlay
structure
Which of the following is MOST LIKELY to be considered a deemed dividend in
transactions between a US multinational corporation (MNC) and its offshore-controlled
foreign corporation (OFC) subsidiaries? - CORRECT ANSWERS-MNC parent borrows
funds from its OFC subsidiary
When transmitting external data on previous-day balances for treasury management,
which is a commonly used format that uses predefined messages? - CORRECT
ANSWERS-SWIFT MT940
When using a bilateral netting system, which of the following should be done if after netting
there is a material foreign exchange (FX) exposure to the company? - CORRECT
ANSWERS-It should be hedged
Correct Answers Verified Latest
Updated 2026-2027 GRADED A+
A company is comparing two potential three-year investments at a discount rate of 12%.
Project A costs $3,500 but should generate a return of $5,000 at the end of the third year,
and Project B costs $5,000 but should generate a return of $7,800 at the end of the third
year. What is the net present value (NPV) for each project? - CORRECT ANSWERS-
Project A: $58.97; Project B: $552.00
Controlled disbursement for a company is important because it - CORRECT ANSWERS-
assists in determining the day's funding requirements.
The Depository Trust and Clearing Corporation (DTCC) - CORRECT ANSWERS-brings
efficiency by netting transactions between brokers, dealers, mutual funds, insurance
companies and other large investors.
A company has the option to lease or buy. If it leases, it does not intend to keep the asset
after the lease expires. If it buys, it intends to sell the asset after it is fully depreciated. The
company should consider ALL of the following when making this calculation EXCEPT -
CORRECT ANSWERS-length of the lease compared to its estimated useful life
Which of the following foreign currency transactions will yield a profit when the price of the
underlying foreign currency rises above the strike price? - CORRECT ANSWERS-A buyer
of a call option on the currency
Which of the following reflects a win-win approach to improving cash flow? - CORRECT
ANSWERS-Focus on the beginning of the operating cycle (purchase of resources through
sale of goods or services)
If an investment bank offers both underwriting/distribution functions and investment
advisory or management functions, which situation would be acceptable under U.S.
Securities and Exchange regulations and ethics guidelines with regard to material non-
public information (MNPI)? - CORRECT ANSWERS-"Bringing someone over the wall" to
provide value to underwriting, who does not comment on MNPI until it has been made
public.
,Labor is the greatest variable cost for a particular business. Equipment is the greatest fixed
cost for the business. Which of the following should the business do if they wish their profits
to expand more rapidly, assuming the company is currently profitable? What will happen to
the break-even level of output for the business if they make the change? - CORRECT
ANSWERS-Invest in equipment to reduce labor costs; the break-even level will increase.
Which of the following correctly indicates how the issue price of common stock shares
would be valued when a corporation makes a follow-on issue? - CORRECT ANSWERS-
The market price of existing shares is used as guidance
Which of the following would help a treasurer sort through the vast data from a treasury
management system (TMS), starting at a high level and showing just the information
relevant to the treasurer's duties? - CORRECT ANSWERS-Dashboard
Transit RoutingEndpoint LocationDeposit DeadlineAvailability08xxxxxxxSt. Louis, MO1
p.m.1 day
Bank XYZ has a published ledger cutoff time of 3:00 p.m. Company ABC deposits a check
drawn on a St. Louis bank on Tuesday at 2:00 p.m. Based on the availability schedule
above, on which of the following days will Company ABC receive availability of the funds? -
CORRECT ANSWERS-Thursday
Which of the following oil call option contracts would be MOST LIKELY to have the
smallest speculative premium? - CORRECT ANSWERS-European option with a strike
price of $90 per barrel, in the money by $5
ABC Company has incurred costs due to its bank repeatedly missing the controlled
disbursement reporting deadline. To which of the following would the company's cash
manager refer? - CORRECT ANSWERS-Service level agreement
When developing formal policies and procedures for treasury operational activities, an
organization determines the primary objective relating to each treasury function (e.g.,
investment management, foreign exchange [FX] risk management, etc.) and then
communicates this information - CORRECT ANSWERS-throughout the entire
organization.
What method may be more problematic to use in the future because banks may no longer
be allowed to net loans against deposition positions as per Basel III? - CORRECT
ANSWERS-Notional pooling
Which of the following is a reason that banks may favor fee compensation over balance
compensation? - CORRECT ANSWERS-Deposit balances increase liabilities on the
balance sheet.
Which of the following eliminates settlement risk? - CORRECT ANSWERS-Continuous
Linked Settlement (CLS)
,A company wants to remove some debt from its balance sheet without actually retiring the
debt issue. Therefore, they buy U.S. government securities and place them in escrow to
guarantee the debt. Which of the following is this company doing? - CORRECT
ANSWERS-Defeasance of debt
Which of the following is a type of fidelity risk? - CORRECT ANSWERS-Employee stealing
a van load of raw materials
Which of the following would serve as an example of a predictable cash flow among the
various degrees of certainty that can be assigned? - CORRECT ANSWERS-Payroll
disbursements
Match each of the following elements of a time series forecast with its example.
Elements:
I. Trend
II. Seasonal pattern
III. Cyclical pattern
IV. Random movement
Examples:
A. An earthquake breaks an oil pipeline, raising gas prices
B. There is a weak increase in prices of fish during February and March
C. Cereal prices rise slowly due to increasing wheat prices
D. Sales are weak at the beginning of each month and strong at month's end - CORRECT
ANSWERS-I: C, II: B, III: D, IV: A
A firm has increased its return on assets (ROA) from the prior period. The firm's return on
sales increased significantly and its total asset turnover decreased a fair amount over the
period. Which of the following is the correct conclusion from these results? - CORRECT
ANSWERS-The firm should look for areas where their investment in assets could be
reduced to increase measures such as cash turnover.
A market participant believes that the price of oil will fall and consequently borrows oil
commodities from a dealer and sells the commodities. After the price eventually does fall,
the participant buys oil commodities on the open market and returns them to the broker
who made the original loan. Which of the following describes this situation? - CORRECT
ANSWERS-A speculator taking a short position
A Chinese investor invests in U.S. Treasury bills. If the Chinese renminbi (RMB)
appreciates during the holding period against the U.S. dollar (USD), this investment -
CORRECT ANSWERS-declines in value but default risk remains unchanged.
Which of the following is true of dealing with insurance providers and/or insurer ratings? -
CORRECT ANSWERS-A.M. Best Company ratings on financial strength and on
indebtedness are independent of one another
, On January 10, the following quotes are provided for $1,000,000 U.S. Treasury bills:
MATURITY DATEDAYS TO MATURITYBID DISCOUNTASK DISCOUNTASK YIELD
PERCENT
February 14 35 1.25 1.24 1.26
February 21 421.25 1.24 1.26
February 28 49 1.24 1.23 1.25
If an investor purchases a T-bill maturing on February 14, what is the holding period yield of
this investment? - CORRECT ANSWERS-0.1207%
A company has an agreement with a bondholder that prevents it from selling several of its
coal-fired power plants. However, recent regulatory changes have made these plants less
profitable and the value of the firm is falling. Which of the following is this agreement
called? - CORRECT ANSWERS-Indenture
Company A's long-term debt to capital ratio is 32.2 and its fixed-charge coverage ratio is
0.14, while Company B's corresponding ratios are 41.5 and 0.20. Each company issues
commercial paper (CP). Which company would have a stronger ability to repay its CP
obligation? - CORRECT ANSWERS-Company B, because B's relatively higher fixed-
charge coverage ratio indicates a stronger ability to cover obligations.
When the yen has a higher interest rate than the U.S. dollar, which of the following is true of
the foreign exchange (FX) rate? - CORRECT ANSWERS-The yen will sell at a discount in
the forward market against the U.S. dollar
An Italian company's bank has branches in each of the European countries in which the
company does business, but the bank does not provide full domestic banking in these
other countries. Therefore, the company must use local banks in these countries for
domestic transactions and transfer of surplus funds to the primary bank. If the primary
bank notionally collects balances together from the various sources, which of the following
BEST describes what this company is using? - CORRECT ANSWERS-Bank overlay
structure
Which of the following is MOST LIKELY to be considered a deemed dividend in
transactions between a US multinational corporation (MNC) and its offshore-controlled
foreign corporation (OFC) subsidiaries? - CORRECT ANSWERS-MNC parent borrows
funds from its OFC subsidiary
When transmitting external data on previous-day balances for treasury management,
which is a commonly used format that uses predefined messages? - CORRECT
ANSWERS-SWIFT MT940
When using a bilateral netting system, which of the following should be done if after netting
there is a material foreign exchange (FX) exposure to the company? - CORRECT
ANSWERS-It should be hedged
