CTP Pre-Exam Practice Tests | (Updated 932 Questions)
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NEW QUESTION 377
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?
- A. Speculative
- B. Commodity
- C. Delivery
- D. Translation
Answer: B
NEW QUESTION 378
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 III only
- B. II and III only
- C. I and IV only
- D. II and IV only
Answer: A
NEW QUESTION 379
At the time of the initial debt contract, the only way debt holders can protect their interests effectively is to establish certain provisions or covenants designed to:
- A. eliminate all events that could result in a default.
- B. give debt holders a guarantee of full principal payment in the event of default.
- C. reduce issuer refinancing options that could result in their bonds being called.
- D. make it difficult for management to engage in actions that reduce the bond's value.
Answer: D
NEW QUESTION 380
Which of the following occurs when the U.S. dollar strengthens?
- A. Foreigners will purchase more U.S. goods.
- B. Foreign exports become less competitive.
- C. U.S. exports become more competitive.
- D. Foreign exports become more competitive.
Answer: D
NEW QUESTION 381
One of the KEY risks associated with a company's use of financial institutions is the possibility that:
- A. the institution will fail, which will have a financial impact on the company.
- B. an institution's operations will put the company in violation of the Gramm-Leach-Bliley Act.
- C. frequent account management turnover at an institution will disrupt the company's operations.
- D. an institution will inadvertently share the company's confidential data with its competitors.
Answer: A
NEW QUESTION 382
Company A has operated a Pension Plan since 1985. Despite a recent surge in asset
values, the plan remains significantly underfunded. With the passage of the Pension Protection Act of 2006, Company A will be need to:
- A. pay higher PBGC premiums.
- B. liquidate long-term investments.
- C. increase long-term investments.
- D. take no action.
Answer: A
NEW QUESTION 383
Which of the following functions is LEAST likely to be part of a cash manager's responsibilities?
- A. Long-term financing
- B. Forecasting
- C. Bank compensation
- D. Funds movement
Answer: A
NEW QUESTION 384
Controlled disbursement notification times can be improved by which of the following?
- A. Increasing the use of multiple transit routing numbers
- B. Using Payor bank services
- C. Implementing a high dollar group sort program
- D. Implementing a 2 P.M. presentment
Answer: B
NEW QUESTION 385
Traditionally the primary source of operating risk in the area of external theft or malfeasance has been related to:
- A. the sale of idle or obsolete fixed assets.
- B. the receipt of unrecorded customer payments.
- C. the payment of false invoices or check fraud.
- D. the disposition of excess inventories.
Answer: C
NEW QUESTION 386
What is the premium (price) for an oil contract, if the following conditions are present?
LIBOR rate of 5% Out of the money cost of $3 Strike price is $4 In the money price of $1 Speculative premium of $2
- A. $7
- B. $5.25
- C. $7.35
- D. $3
Answer: A
NEW QUESTION 387
Customers of an electronic trading firm are experiencing problems with the online trading platform. The company IT department discovered that although display of market data is in the proper place, there are no tags being used to populate specific information in the necessary fields. The company is MOST LIKELY experiencing a problem with:
- A. Electronic Data Interchange (EDI).
- B. Extensible Markup Language (XML).
- C. Hypertext Markup Language (HTML).
- D. Public Key Infrastructure (PKI).
Answer: B
NEW QUESTION 388
With respect to the Sarbanes-Oxley Act, a company may avoid additional reporting requirements by:
- A. issuing shares in an IPO.
- B. delisting its securities.
- C. providing an SSAE 16.
- D. redeeming bond issues.
Answer: B
NEW QUESTION 389
In a private label financing arrangement, the seller does which of the following?
- A. Loses authority to decide which customers receive credit.
- B. Receives the full face value of the sale in most cases.
- C. Operates its own credit function as a subsidiary.
- D. Commits funds to finance accounts receivable.
Answer: A
NEW QUESTION 390
ABC company has a significant number of customers who are mainly consumers making monthly installment payments. Which one of the following types of lockbox would be the MOST appropriate for ABC to use?
- A. In-house
- B. Retail
- C. Wholesale
- D. Hybrid
Answer: B
NEW QUESTION 391
Included in the CAMELS rating system for financial institutions are all of the following EXCEPT:
- A. earnings.
- B. credit rating.
- C. asset quality.
- D. liquidity.
Answer: B
NEW QUESTION 392
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
- A. I and II only
- B. I, II, and III
- C. I only
- D. II and III only
Answer: B
NEW QUESTION 393
A company converts the expense processing for its sales team from reimbursement by check to providing the team with travel and entertainment cards. Immediately, the company's expenses for the sales force increase by 10%, with no concurrent increase in sales volumes. What aspect should the company have covered in their policies for card use to prevent the increased expenses?
- A. Access control
- B. Approved uses
- C. Definition of responsibilities
- D. Vulnerability management
Answer: B
NEW QUESTION 394
The time from the deposit of a check in a bank account until the funds can be used by the payee is known as:
- A. availability float.
- B. mail float.
- C. processing float.
- D. collection float.
Answer: A
NEW QUESTION 395
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