Online Access Free CTP Exam Questions

An international company would establish a re-invoicing center for which of the following reasons?

• A.To take advantage of interest-bearing demand deposits
• B.To bring transaction exposures more closely in line with economic exposures
• C.To manage the foreign exchange exposure of its foreign subsidiaries
• D.To reduce its international balance reporting charges

Company XYZ is conservative when investing in their short-term portfolio. XYZ is looking to add the following money market instruments in their own country: a reverse re-purchase agreement, a floating-rate note, and a negotiable certificate of deposit. What types of investment risks are associated with these instruments?

• A.Liquidity and price risk
• B.Default and liquidity risk
• C.Credit and price risk
• D.Default, liquidity and price risk

When a company creates future receivables and/or payables that are denominated in a currency other than its home or functional currency it is faced with:

• A.transaction exposure.
• B.translation exposure.
• C.economic exposure.
• D.futures risk exposure.

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.increase long-term investments.
• C.take no action.
• D.liquidate long-term investments.

Company XYZ is in its first year of operations. The company culture is conservative, and it has $500 million to invest in short-term investments. The company has a growth rate of 25% and is looking to issue an IPO in the near future. The investment manager is in the process of creating a short-term investment policy which must be approved by the board of directors. An item that should be included in the policy is:

• A.methods of monitoring compliance with policies, procedures and internal controls.
• B.maximum dollar amount of mortgage-backed securities.
• C.internal controls for the enterprise resource planning system (ERP).
• D.methods of monitoring compliance with the SEC.