[Jan-2022] Exam CTP: New Brain Dump Professional - Lead2PassExam
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NEW QUESTION 240
A company recently implemented a treasury code of conduct, which defined appropriate actions and business behaviors. The company developed policies and procedures that assigned duties to managers, and distributed the code to all treasury employees. The treasury group could have improved upon this implementation by doing which one of the following?
- A. Providing training on the code to all employees
- B. Having the code certified under Sarbanes-Oxley Act requirements
- C. Having the code of conduct reviewed by the marketing department
- D. Incorporating the code under its disaster recovery plan
Answer: A
NEW QUESTION 241
Contingency plans often focus on the business supply chain, ensuring that customer service is maintained. The financial supply chain, which is equally critical to the plan, should address:
- A. purchasing systems.
- B. production resources.
- C. supplier linkages.
- D. working capital management.
Answer: D
NEW QUESTION 242
XYZ Company is considering the purchase of a security that generates a tax equivalent yield of 10% and a tax exempt yield of 7.1%. What is XYZ's marginal investment tax rate?
- A. 29.0%
- B. 61.0%
- C. 36.1%
- D. 40.8%
Answer: A
NEW QUESTION 243
Underfunded pension obligations can be reduced by:
- A. higher benefit payments to retirees.
- B. higher premiums to the Pension Benefit Guaranty Corporation.
- C. an upward shift in the yield curve.
- D. immediate vesting in the defined contribution plan.
Answer: C
NEW QUESTION 244
Included in the CAMELS rating system for financial institutions are all of the following EXCEPT:
- A. asset quality.
- B. credit rating.
- C. earnings.
- D. liquidity.
Answer: B
NEW QUESTION 245
What should a company's senior management consider in their payment policies to eliminate the co-mingling of funds for payables, receivables and foreign exchange transactions?
- A. Required control points
- B. Payment laws and regulations
- C. Bank account structuring
- D. Participants in the payment process
Answer: C
NEW QUESTION 246
The credit management function is responsible for:
- A. approving customers.
- B. concentrating lockbox receipts.
- C. forecasting cash flow.
- D. establishing the bank network.
Answer: A
NEW QUESTION 247
Two critical factors in determining an operational risk management strategy for a company are:
- A. organizational culture and technology.
- B. physical security and the number of manual processes.
- C. technology and data security.
- D. industry standards and competition.
Answer: A
NEW QUESTION 248
Which of the following is an example of off-balance-sheet financing?
- A. Capital lease
- B. Zero-coupon bond
- C. Commercial paper
- D. Factoring receivables
Answer: D
NEW QUESTION 249
Which of the following statements are true about the use of different discount rates for different types of projects?
I.Low-risk, short-term projects may be evaluated by using a short-term opportunity cost.
II.High-risk projects may be evaluated by using a discount rate that is greater than the company's normal opportunity cost.
III.A short-term investment (or borrowing) rate may be used as the company's short-term discount rate.
IV.The use of a lower discount rate for riskier projects forces riskier projects to earn higher rates of return.
- A. II, III, and IV only
- B. I, II, and III only
- C. I and II only
- D. I and IV only
Answer: B
NEW QUESTION 250
A portfolio manager wishes to make a short-term investment. His investment policy requires that short-term investments be low risk and secured, have a fixed interest rate and be highly liquid/redeemable prior to maturity. Which of the following should the manager choose?
- A. Asset-backed commercial paper
- B. Bank obligations
- C. Commercial paper
- D. Government treasury bills
Answer: A
NEW QUESTION 251
What is this firm's residual income?
Revenues: $110,000
Expenses (including COGS and all taxes): $87,000
Internal rate of return: 8.5%
Capital Investment: $55,000
ROI: 8.0%
Cost of capital: 11%
- A. $18,325
- B. $18,600
- C. $16,500
- D. $16,950
Answer: D
NEW QUESTION 252
In a large company, the person who normally oversees both the treasury and the
accounting functions is the:
- A. chief operations officer.
- B. controller.
- C. chief financial officer.
- D. treasurer.
Answer: C
NEW QUESTION 253
A company's credit agreements or loan covenants may require:
- A. outsourcing of the claims approval and payment process to an insurance company.
- B. high deductible levels and risk retention in order to minimize premium payments.
- C. minimum ratings for insurance carriers.
- D. risk management staff to work directly with underwriters to reduce commission
payments.
Answer: C
NEW QUESTION 254
The School of Cash Management is dealing with a large bank that has been highly rated by Moody's and S&P. The School has a purchasing card program in place and is not using a highly secure student registration data base. Both the School and the bank have highly automated payment processes. Based on the automation factor, the School should be MOST concerned about which of the following types of fraud exposure?
- A. ACH kiting fraud
- B. Credit card fraud
- C. Wire fraud
- D. Payroll fraud
Answer: C
NEW QUESTION 255
Which of the following clears international checks?
- A. Check truncation
- B. Correspondent banks
- C. SWIFT
- D. Fedwire
Answer: B
NEW QUESTION 256
A pizza restaurant chain maintains separate accounts at bank branches near each of their 1,067 restaurants to handle the deposit of cash received. Early each morning, the company's point-ofsale system electronically transmits collection totals from the previous day to its main computer. ACH debits are then initiated to concentrate the funds from the local accounts to the concentration account the following day. Recently, several of the ACH debits have been returned for insufficient funds because deposits weren't being taken to the bank on a timely basis by the local employees.
Without increasing staff at the restaurants, what could Treasury do to prevent this from happening and avoid overdrafts at the local banks?
- A. Use a courier to deposit to each bank 3 times per week.
- B. Use wire transfers to concentrate the cash instead of ACH.
- C. Install smart safes at each restaurant location.
- D. Negotiate better float schedules at its local banks.
Answer: C
NEW QUESTION 257
An internal auditor discovers that employees can enter and approve their own wire transfers. This practice violates what internal control?
- A. Accurate reporting of cash transactions
- B. Proper authorization of investment transactions
- C. Appropriate monitoring of covenant compliance
- D. Adequate segregation of duties
Answer: D
NEW QUESTION 258
A cash manager is determining the threshold over which cash concentrations will be done by wire. An ACH transaction costs $0.50. A wire costs $12.00. Funds are available 2 days quicker by wire and the opportunity cost of funds is 5%. What threshold should the cash
manager use?
- A. $41,975
- B. $43,800
- C. $83,942
- D. $87,600
Answer: A
NEW QUESTION 259
The cash manager for a company is creating a list of transactions that should be considered when determining the daily projected closing cash position. Which of the following transactions should be removed from the list?
- A. Future-dated wire transfers and disbursements
- B. Controlled disbursement totals
- C. Expected settlements in collection (lockbox)
- D. Estimates of non-controlled disbursement account clearings
Answer: A
NEW QUESTION 260
U.S.-based manufacturing Company XYZ is looking to deliver finished goods to ABC Company in a developing nation. The credit department wants to ensure collectability and has asked the treasury department for guidance. The desired solution may impact days sales' outstanding but will have the lowest credit risk to Company XYZ. What will treasury recommend?
- A. A standby letter of credit
- B. Extended trade terms
- C. A draft/bill of lading
- D. A consignment agreement
Answer: A
NEW QUESTION 261
Which of the following methods of compensation is NOT used by banks in the United States?
- A. Check clearing charges
- B. Value dating
- C. Account service fees
- D. Wire charges
Answer: B
NEW QUESTION 262
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.
Answer: C
NEW QUESTION 263
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