CTP Sample Test Questions with
Correct Answers 2026
Company ABC has a concentrated investor base consisting primarily of large institutional
shareholders. It would like to increase its number of smaller shareholders using the most
cost effective method of raising capital available. What should Company ABC do to
accomplish this goal? - CORRECT ANSWERS-Implement a dividend reinvestment plan
A cash manager at a retailer forecasts a positive collected cash position for the end of the
current day. The company has an overdraft facility at 10%, a separate investment account
earning 8% before taxes, an earnings credit rate of 8% and an outstanding single payment
note at 9.5% maturing in 1 week. This month's bank service fees are expected to exceed
the earnings credit. Which of the following intra-day options would be the MOST
economically positive for the company? - CORRECT ANSWERS-Leave the funds in the
account
Which of the following BEST describes an advantage of a company going public? -
CORRECT ANSWERS-Increased Liquidity
When a short-term loan is paid with a lump sum payment and the payment includes both
interest and principal, the loan is often referred to as a: - CORRECT ANSWERS-Single
payment note
The Company J portfolio consists of two stocks, 65% of Stock A with a return of 7.63% and
35% of Stock B with a return of 3.89%. What is the Company J portfolio return? -
CORRECT ANSWERS-6.32%
What does a company with a restrictive current asset investment strategy typically have? -
CORRECT ANSWERS-Low accounts receivable balances
Which of the following is a ratio that is often used by commercial banks to measure a
company's leverage and does not include the effect of assets that are difficult to value or
are NOT easily converted to cash? - CORRECT ANSWERS-Debt to tangible net worth
Which of the following can be considered key responsibilities of daily cash management?
I. Overseeing compensation for bank services
,II. Management of short-term borrowing and investing
III. Projecting future cash shortages and surpluses - CORRECT ANSWERS-I, II, & III
Senior management at ABC Company plans to make a large capital expenditure to bolster
its infrastructure exactly one year from now. Their primary concern is to preserve the
current capital position until the expected cash outlay. The majority of the cash at ABC
Company is held in treasury notes, but management would like to also invest some of the
money into corporate bonds and money market funds. Which investment objective BEST
suits the needs of ABC Company? - CORRECT ANSWERS-Safety
Earnings Credit calculation: Assumptions - Average ledger balance $1,500,000 Deposit
Float $250,000 Reserve Requirement 10% Earnings Credit Rate 45 bps Service Charges
for the month $12,500 Days in the Month 30 What is the earnings credit the company is
receiving for this month? - CORRECT ANSWERS-$416.10
Using the information provided for question 10, what would the earnings credit change to if
the company negotiated a 50% decrease in deposit float ? - CORRECT ANSWERS-
$457.71
The treasurer of a corporation is negotiating with one of his/her suppliers to allow the
corporation to have 30 days to pay the supplier's invoices. The treasurer is arranging: -
CORRECT ANSWERS-Short-term financing
When using the Internet to access auction markets, companies may use certificate
authorities to reduce their exposure to which of the following types of risk? - CORRECT
ANSWERS-Counterparty
A company can pay their supplier by check or by electronic transfer. If the difference
between the value date of the payment methods is 4 days from the company's perspective,
what discount should the supplier offer them to get the company to pay on the same day as
they did when they paid by check (rounded to the nearest 100th percent)? Assume no
difference in the cost of the payment method, an opportunity cost of 8%, and float
neutrality. - CORRECT ANSWERS-0.09%
Which of the following is a tool that companies use to obtain a quantitative rating of a
financial institution's level of service? - CORRECT ANSWERS-Score card
An airline wants to lock in the price of the jet fuel it needs to purchase to satisfy the peak in-
season demand for travel. The airline wants to manage its exposure to fluctuations in fuel
prices. What type of exposure is this? - CORRECT ANSWERS-Commodity
, A French exporter sells goods to a foreign buyer in euros and wants to guarantee that
payment is made by the buyer. The exporter would MOST LIKELY require a(n): -
CORRECT ANSWERS-Letter of credit
The right of stockholders to purchase, on a pro-rata basis, any new shares issued by the
company is referred to as: - CORRECT ANSWERS-Preemptive right
After a recent review of its insurance policies, a petroleum products company determines it
needs to re-evaluate its risk exposure to potentially reduce its insurance premiums. The
company has operated in two locations for 20 years but only produces and stores
petroleum at one location. In doing so, the risk manager determines the following
exposures:
• The number of employee workers compensation claims due to injuries while loading
trucks has increased 25% in the past 12 months
• The primary tank used for petroleum storage is 13 years old and standard life of tanks of
this model is 20 years
• There is only one road into the current petroleum storage facility
Given the above information, if the risk manager constructs a second road into the
petroleum storage facility, what risk management strategy is being used? - CORRECT
ANSWERS-Risk mitigation
Which of the following contributes MOST to the marketability of a security? - CORRECT
ANSWERS-A large, active secondary market
A large, mature, diversified and publicly traded company sells the smallest of its business
segments to a strategic buyer for cash. It uses the proceeds to pay off all bank debt and
subordinated debenture debt on its books. The company believes the stock is trading at a
reasonable price and continues to pay a regular, steady dividend to shareholders.
Management's strategy is to embark on an aggressive growth plan including a major
acquisition.
Based on the above information, if the company uses the trade-off theory in considering its
WACC, how will it finance its growth? - CORRECT ANSWERS-By using long-term debt
The treasury manager of a privately held company is looking to finance new equipment
that has a useful life of 5 years. What type of financing would the Treasury Manager MOST
LIKELY employ to finance the equipment? - CORRECT ANSWERS-Installment term loan
A retail brokerage firm is MOST like which one of the following types of financial
institutions? - CORRECT ANSWERS-Investment banks
Correct Answers 2026
Company ABC has a concentrated investor base consisting primarily of large institutional
shareholders. It would like to increase its number of smaller shareholders using the most
cost effective method of raising capital available. What should Company ABC do to
accomplish this goal? - CORRECT ANSWERS-Implement a dividend reinvestment plan
A cash manager at a retailer forecasts a positive collected cash position for the end of the
current day. The company has an overdraft facility at 10%, a separate investment account
earning 8% before taxes, an earnings credit rate of 8% and an outstanding single payment
note at 9.5% maturing in 1 week. This month's bank service fees are expected to exceed
the earnings credit. Which of the following intra-day options would be the MOST
economically positive for the company? - CORRECT ANSWERS-Leave the funds in the
account
Which of the following BEST describes an advantage of a company going public? -
CORRECT ANSWERS-Increased Liquidity
When a short-term loan is paid with a lump sum payment and the payment includes both
interest and principal, the loan is often referred to as a: - CORRECT ANSWERS-Single
payment note
The Company J portfolio consists of two stocks, 65% of Stock A with a return of 7.63% and
35% of Stock B with a return of 3.89%. What is the Company J portfolio return? -
CORRECT ANSWERS-6.32%
What does a company with a restrictive current asset investment strategy typically have? -
CORRECT ANSWERS-Low accounts receivable balances
Which of the following is a ratio that is often used by commercial banks to measure a
company's leverage and does not include the effect of assets that are difficult to value or
are NOT easily converted to cash? - CORRECT ANSWERS-Debt to tangible net worth
Which of the following can be considered key responsibilities of daily cash management?
I. Overseeing compensation for bank services
,II. Management of short-term borrowing and investing
III. Projecting future cash shortages and surpluses - CORRECT ANSWERS-I, II, & III
Senior management at ABC Company plans to make a large capital expenditure to bolster
its infrastructure exactly one year from now. Their primary concern is to preserve the
current capital position until the expected cash outlay. The majority of the cash at ABC
Company is held in treasury notes, but management would like to also invest some of the
money into corporate bonds and money market funds. Which investment objective BEST
suits the needs of ABC Company? - CORRECT ANSWERS-Safety
Earnings Credit calculation: Assumptions - Average ledger balance $1,500,000 Deposit
Float $250,000 Reserve Requirement 10% Earnings Credit Rate 45 bps Service Charges
for the month $12,500 Days in the Month 30 What is the earnings credit the company is
receiving for this month? - CORRECT ANSWERS-$416.10
Using the information provided for question 10, what would the earnings credit change to if
the company negotiated a 50% decrease in deposit float ? - CORRECT ANSWERS-
$457.71
The treasurer of a corporation is negotiating with one of his/her suppliers to allow the
corporation to have 30 days to pay the supplier's invoices. The treasurer is arranging: -
CORRECT ANSWERS-Short-term financing
When using the Internet to access auction markets, companies may use certificate
authorities to reduce their exposure to which of the following types of risk? - CORRECT
ANSWERS-Counterparty
A company can pay their supplier by check or by electronic transfer. If the difference
between the value date of the payment methods is 4 days from the company's perspective,
what discount should the supplier offer them to get the company to pay on the same day as
they did when they paid by check (rounded to the nearest 100th percent)? Assume no
difference in the cost of the payment method, an opportunity cost of 8%, and float
neutrality. - CORRECT ANSWERS-0.09%
Which of the following is a tool that companies use to obtain a quantitative rating of a
financial institution's level of service? - CORRECT ANSWERS-Score card
An airline wants to lock in the price of the jet fuel it needs to purchase to satisfy the peak in-
season demand for travel. The airline wants to manage its exposure to fluctuations in fuel
prices. What type of exposure is this? - CORRECT ANSWERS-Commodity
, A French exporter sells goods to a foreign buyer in euros and wants to guarantee that
payment is made by the buyer. The exporter would MOST LIKELY require a(n): -
CORRECT ANSWERS-Letter of credit
The right of stockholders to purchase, on a pro-rata basis, any new shares issued by the
company is referred to as: - CORRECT ANSWERS-Preemptive right
After a recent review of its insurance policies, a petroleum products company determines it
needs to re-evaluate its risk exposure to potentially reduce its insurance premiums. The
company has operated in two locations for 20 years but only produces and stores
petroleum at one location. In doing so, the risk manager determines the following
exposures:
• The number of employee workers compensation claims due to injuries while loading
trucks has increased 25% in the past 12 months
• The primary tank used for petroleum storage is 13 years old and standard life of tanks of
this model is 20 years
• There is only one road into the current petroleum storage facility
Given the above information, if the risk manager constructs a second road into the
petroleum storage facility, what risk management strategy is being used? - CORRECT
ANSWERS-Risk mitigation
Which of the following contributes MOST to the marketability of a security? - CORRECT
ANSWERS-A large, active secondary market
A large, mature, diversified and publicly traded company sells the smallest of its business
segments to a strategic buyer for cash. It uses the proceeds to pay off all bank debt and
subordinated debenture debt on its books. The company believes the stock is trading at a
reasonable price and continues to pay a regular, steady dividend to shareholders.
Management's strategy is to embark on an aggressive growth plan including a major
acquisition.
Based on the above information, if the company uses the trade-off theory in considering its
WACC, how will it finance its growth? - CORRECT ANSWERS-By using long-term debt
The treasury manager of a privately held company is looking to finance new equipment
that has a useful life of 5 years. What type of financing would the Treasury Manager MOST
LIKELY employ to finance the equipment? - CORRECT ANSWERS-Installment term loan
A retail brokerage firm is MOST like which one of the following types of financial
institutions? - CORRECT ANSWERS-Investment banks
