Practice CTP Exam Online

Question 1

If a company has $126 million in debt at an average cost of 7% and $234 million in equity at a cost of 11%, what is its weighted average cost of capital, assuming a marginal tax rate of 35% and a risk-adjusted rate of 13%?

A : 8.7%

B : 9.6%

C : 10.0%

D : 10.9%

Answer: A

Question 2

The issue of corporate governance in publicly traded companies arises from:

A : the separation of shareholder ownership and management control.

B : the conflict between the interests of bond holders and equity holders.

C : the secrecy surrounding the proceedings of board of directors meetings.

D : the inherent conflict of interest that exists when accounting firms are paid to provide audit services.

Answer: A

Question 3

A U.S. company has a secured committed line of credit of $5.5 million and has an available balance of $4 million. The company successfully transmitted a $5.5 million wire transfer instruction out to the bank via SWIFT. The bank contacted the company and informed it that the wire transfer would not be processed. What is the MOST LIKELY reason the bank gave the company?

A : Wires exceeding $5 million cannot be transmitted using SWIFT.

B : The bank imposed a guidance line of credit on the account.

C : The company exceeded its compensating balance requirement.

D : The bank refused funding on the company’s discretionary line of credit.

Answer: B

Question 4

A diversified industrial company operates multiple remote manufacturing facilities that manage local supplier relationships. The company draws on a single line of credit for all of its working capital needs. Which of the following types of disbursement systems would BEST meet this company's needs?

A : Centralized check issuance drawn on a central disbursement bank

B : Decentralized check issuance drawn on a local disbursement bank

C : Decentralized check issuance drawn on a central disbursement bank

D : Centralized check issuance drawn on a local disbursement bank

Answer: C

Question 5

The yield curve is inverted. A creditworthy firm considering alternative debt maturities would MOST LIKELY:

A : enter into a short-term floating rate agreement.

B : obtain long-term fixed interest rate debt.

C : roll-over short-term debt at each maturity.

D : obtain a long-term floating rate agreement.

Answer: B

Name:	Certified Treasury Professional
Exam Code:	CTP
Certification:	AFP Certification
Vendor:	AFP
Total Questions:	932
Last Updated:	Jul 15, 2026

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