CTP Certified Treasury Professional

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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

Answer: B

Explanation:

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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

Answer: A

Explanation:

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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

Answer: A

Explanation:

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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

Answer: A

Explanation:

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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

Answer: A

Explanation:

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