afp ctp practice test

Certified Treasury Professional

Last exam update: Nov 18 ,2025
Page 1 out of 72. Viewing questions 1-15 out of 1076

Question 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

  • A. I and II only
  • B. I and IV only
  • C. II and IV only
  • D. I, II, III, and IV
Mark Question:
Answer:

B


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Question 2

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

  • A. an equity warrant
  • B. a put option
  • C. a zero coupon bond
  • D. a subordinated debenture
Mark Question:
Answer:

A


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Question 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?

  • A. Convertible bonds
  • B. Private placement issue
  • C. Preferred stock
  • D. Subordinated debentures
Mark Question:
Answer:

A


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Question 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:

  • A. sinking fund
  • B. balloon payment
  • C. mortgage
  • D. zero-coupon bond
Mark Question:
Answer:

A


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Question 5

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

  • A. Master note
  • B. Banker's acceptance
  • C. Indenture agreement
  • D. Note purchase agreement
Mark Question:
Answer:

A


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Question 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?

  • A. Not exercise the option and lose $2.
  • B. Not exercise the option and lose $6.
  • C. Exercise the option and gain $2.
  • D. Exercise the option and gain $4.
Mark Question:
Answer:

A


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Question 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?

  • A. Exercise the option and gain $7.
  • B. Exercise the option and gain $10.
  • C. Not exercise the option and lose $3.
  • D. Not exercise the option and lose $13.
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Answer:

A


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Question 8

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

  • A. notional principal amounts.
  • B. amortization schedules.
  • C. maturity dates of obligations.
  • D. cash flows at future points in time.
Mark Question:
Answer:

D


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Question 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?

  • A. Collar
  • B. Swap
  • C. Cap
  • D. Spot purchase
Mark Question:
Answer:

A


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Question 10

On the basis of the following exchange rates,

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

  • A. C$750,000
  • B. £850,000
  • C. €900,000
  • D. ¥5,000,000
Mark Question:
Answer:

B


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Question 11

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

  • A. They operate through their postal systems.
  • B. They are primarily used for company-to-company payments.
  • C. They do not replace checks for the payment of bills.
  • D. They do not allow the use of direct debits and credits.
Mark Question:
Answer:

A


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Question 12

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

  • A. European giro providers
  • B. Foreign subsidiaries of a company
  • C. Counterparties in a letter of credit transaction
  • D. TARGET participants
Mark Question:
Answer:

B


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Question 13

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

  • A. Pooling
  • B. Internal factoring
  • C. Multilateral netting
  • D. Re-invoicing
Mark Question:
Answer:

D


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Question 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:

  • A. pool excess funds in the United States to offset German deficits.
  • B. implement a dollar-based multilateral netting system.
  • C. start leading receivables from the German subsidiary.
  • D. establish a multicurrency account in the United States.
Mark Question:
Answer:

C


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Question 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

  • A. I and IV only
  • B. I and III only
  • C. II and III only
  • D. II and IV only
Mark Question:
Answer:

B


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