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Exam Code : CTP
Exam Name : Certified Treasury Professional 2024
Vendor Name : "AFP"







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Question: 304

Advantages of writing checks locally on a centralized disbursing bank include all of the following EXCEPT which statement?


  1. It minimizes the number of banks.

  2. It provides opportunity for volume discounts on bank charges.

  3. It reduces idle balances.

  4. It decreases administrative costs.




Answer: D



Question: 305

All of the following would encourage a company operating nationwide to develop multiple banking relationships EXCEPT:


  1. enhanced credit availability.

  2. availability of specialized services.

  3. geographic proximity.

  4. administrative cost savings.




Answer: D



Question: 306

The following information about a company is at the end of its fiscal year.



The before-tax cost of long-term debt is 10% and the cost of equity is 12%. The marginal tax rate is 35%. The company's current ratio is:


A. 0.46.

B. 0.59.

C. 0.93.

D. 1.37.




Answer: D



Question: 307

Which two of the following are optimal uses for short-term excess cash?

  1. Make overnight investments.

  2. Repurchase stock.

  3. Make capital expenditures.


  1. I and II

  2. I and III

  3. II and III

  4. II and IV




Answer: A



Question: 308

A supplier can improve invoicing float by:


  1. renegotiating credit terms.

  2. establishing a bank lockbox.

  3. shortening its order-entry process.

  4. factoring its receivables.




Answer: C



Question: 309

A measure of the incremental impact of a company's investments on market capitalization is known as:


  1. weighted average cost of capital.

  2. economic value added.

  3. return on equity.

  4. working capital turnover.




Answer: B



Question: 310

Which of the following is an example of a qualitative factor used in making credit decisions?


  1. Character

  2. Capital

  3. Collateral

  4. Capacity




Answer: A



Question: 311

Which of the following activities creates administrative costs associated with a concentration system?


  1. Scheduling cash transfers

  2. Monitoring short-term investments

  3. Reviewing positive pay exception reports

  4. Centralizing the check issuance process




Answer: A