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AFP CTP Exam
Certified Treasury Professional (Page 35 )

Updated On: 19-Jan-2026
Page 35 of 188
PDF with 1076 Questions

Which of the following statements is (are) true about non-repetitive wires?

I). They may require additional security steps.
II). They are typically used for cash concentration.
III). They may be used for transactions where dates, parties, and/or amounts may be variable.

  1. III
  2. I and II
  3. I and III
  4. I, II, and III

Answer(s): C



A company's investment guidelines typically restrict all of the following EXCEPT:

  1. maturities of instruments that may be purchased.
  2. proportion of the portfolio invested in specific types of instruments.
  3. purchase of unrated securities.
  4. issuance of commercial paper.

Answer(s): D



Which of the following is a typical overnight use of excess cash?

  1. Entering into a repurchase agreement
  2. Investing in Dutch auction preferred stock
  3. Purchasing a Treasury bill
  4. Purchasing a certificate of deposit

Answer(s): A



A company has a $300,000 credit line of which $200,000 was the average amount outstanding for the year. The terms of the loan include a 1/2 of 1% commitment fee on the unused portion, an interest rate of 10%, and a compensating balance requirement of 2% of the total credit line. The company's compensating balances are funded from credit-line borrowings.
What is the effective annual interest rate on the net usable funds?

  1. 10.00%
  2. 10.25%
  3. 10.31%
  4. 10.57%

Answer(s): D



A company has a $300,000 credit line of which $200,000 was the average amount outstanding for the year. The terms of the loan include a 1/2 of 1% commitment fee on the unused portion, an interest rate of 10%, and a compensating balance requirement of 2% of the total credit line. The company's compensating balances are funded from credit-line borrowings.

If the company negotiates to eliminate the compensating balance requirement and the average borrowings remain at $200,000, the annual interest rate would be:

  1. 10.00%.
  2. 10.25%.
  3. 10.31%.
  4. 10.57%.

Answer(s): B



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