CTP Day 2 Mock Exam

In terms of corporate governance; who assumes the role of trustee or fiduciary for stakeholders including shareholders, donors to not-for-profits, customers, employees and even society in general?

Which is an expected result of proper long-term treasury management?

Which of the following roles would be responsible for preserving and collecting accounts receivable?

A bank has its headquarter located in the United states but also operates in a number other c What services can it offer at each location?

Which of the following types of financial institutions executes the distribution side of an investment bank’s intermediation function and can sell research that has some guarantee of independence?

In contrast with money market funds (MMFs), short-duration mutual funds

Which of the following qualities of asset-backed commercial paper (ABCP) equate to a moderately higher rate of the return than standard CP?

I. It is secured against assets from a single company or a range of companies

II. ABCP is harder to appraise than standard CP

III. Liquidity Support (or credit enhancement) facilitate timely repayment at maturity

IV. Assets used as collateral require specialist credit-monitoring

What is usually being sold and repurchased in a repurchase agreement (repo)?

Why have financial institutions (FIs) been heavy users of preferred stock?

Why must individuals responsible for funds management interact daily with accounts payable and accounts receivable?

All of the following are used to determine required collected balances EXCEPT

Calculate the earnings credit for a 30-day month on a bank account that has $1,000,000 in average ledger balances, average deposit float of $100,000, a reserve requirement (PR) of 10% and an earnings credit rate (ECR) of 2%.

When preparing a request for proposal (RFP), which is the BEST solution if a vendor longlist is simply too large for the company’s requirements?

Which is a best practice for a situation in which a bidder for a request for proposal (RFP) asks the organization a question related to the RFP?

Which of the following can a bank do to offset the cost of federally mandated deposit insurance from the Federal Deposit Insurance Corporation (FDIC)?

What is a best practice for an organization to do immediately following the final vendor meeting and demonstration for a request for proposal (RFP)?

A country passes a law stating that international businesses wishing to operate in that country must be owned by resident nationals. What type of political risk does this scenario present?

When Calculating the sources and uses of funds on the statement of cash flows, how would the following changes between the prior and current period’s balance sheet accounts be interpreted on the statement of cash flows?

I. Increase in an asset

II. Increase in depreciation

III.      Decrease in asset

IV. Decrease in a liability

Which of the following shows what would be acceptable to list at the top of an income statement, and why?

A division of a toy company has net income of $2,000, short-term debt of $2,000, long-term debt of $5,000 and the shareholder’s equity of $20,000. The division has the opportunity to invest in a new line of collectible cards, which would increase its short-term debt to $3,000, long-debt to $15,000, and net income to $2,600. The overall cost of capital for the toy division’s holding company is 7%. What would the residual income be before and after the investment?