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Free Questions › CTP › Relationship and Bank Account Management
Free CTP Relationship and Bank Account Management Practice Questions & Answers
150 exam-style Relationship and Bank Account Management questions. Pick your answer, hit Check answer, and see the worked solution — free to start, no signup.
100% free · No login to startQuestion 31
Why is a strong relationship between treasury and the IT department important?
Select an option first.
Correct answer: D — IT supports treasury systems, connectivity, data integration, and cybersecurity
Explanation: IT provides the infrastructure, integrations, and security that treasury systems depend on, including TMS deployment, bank connectivity, and protection against cyber threats. Effective collaboration ensures reliable, secure treasury operations.
Question 32
Treasury coordinates with the tax function primarily to address issues such as:
Select an option first.
Correct answer: B — Cross-border cash movements, withholding taxes, and the tax efficiency of funding structures
Explanation: Tax implications heavily influence intercompany funding, repatriation of cash, withholding on cross-border flows, and the structuring of financing and pooling arrangements. Treasury and tax must coordinate so cash strategies are tax-efficient and compliant.
Question 33
Treasury supports the internal audit function by:
Select an option first.
Correct answer: D — Providing documentation of controls and cooperating in reviews of treasury processes
Explanation: Treasury provides internal audit with access to processes, controls documentation, and records so audit can independently assess control effectiveness and compliance. This cooperation strengthens governance and helps identify and remediate control weaknesses.
Question 34
Treasury frequently partners with payroll to ensure that:
Select an option first.
Correct answer: B — Sufficient funded balances and appropriate accounts are in place to meet payroll disbursement obligations on time
Explanation: Payroll represents a large, time-sensitive recurring disbursement, so treasury must ensure funds are available and the right accounts and payment methods are in place to meet each payroll cycle. Coordination prevents shortfalls and failed or late payments.
Question 35
A correspondent bank is best described as a bank that:
Select an option first.
Correct answer: D — Provides services, such as payment processing and account holding, to another bank, often in a different country
Explanation: A correspondent bank provides services, including holding accounts and processing payments and foreign exchange, on behalf of another (respondent) bank, frequently to enable cross-border transactions. This network lets banks serve customers in markets where they have no direct presence.
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Question 36
In correspondent banking, a nostro account is:
Select an option first.
Correct answer: A — An account a bank holds in a foreign currency at another (correspondent) bank
Explanation: A nostro account is one that a bank holds at a correspondent bank abroad, typically denominated in the correspondent's local currency, to settle foreign transactions. From the correspondent's perspective the same account is a vostro account.
Question 37
An overlay bank in a global cash management structure typically:
Select an option first.
Correct answer: D — Provides a coordinating cross-border layer that consolidates balances held with various local (in-country) banks
Explanation: An overlay structure uses a global (overlay) bank to provide a coordinating layer that sweeps or consolidates balances from local in-country banks, delivering centralized visibility and control. Local banks are still typically needed for domestic collections and disbursements.
Question 38
SWIFT gpi (global payments innovation) was developed primarily to:
Select an option first.
Correct answer: B — Improve the speed, transparency, and end-to-end tracking of cross-border payments
Explanation: SWIFT gpi enhances cross-border payments with faster settlement, transparency on fees, and end-to-end tracking of payment status. It addresses long-standing frustrations with the speed and opacity of traditional correspondent-based international payments.
Question 39
A company pays $500,000 in total annual banking fees across all its banks. Bank X receives $200,000 of that total. What is Bank X's share of wallet?
Select an option first.
Correct answer: D — 40%
Explanation: Share of wallet equals the fees paid to a specific bank divided by total banking fees: $200,000 / $500,000 = 0.40, or 40%. Banks track share of wallet to judge whether the ancillary business they receive justifies the credit and services they extend.
Question 40
In an RFP evaluation, Bank A scores 8 on price (weighted 40%), 6 on service (weighted 30%), and 9 on technology (weighted 30%). What is Bank A's total weighted score?
Select an option first.
Correct answer: B — 7.7
Explanation: The weighted score is (8 x 0.40) + (6 x 0.30) + (9 x 0.30) = 3.2 + 1.8 + 2.7 = 7.7. Weighted scoring lets a treasury combine multiple criteria with differing importance into a single comparable number across bidders.
Question 41
Of 5,000 payment transactions processed in a month, 4,600 flowed through the system without any manual intervention. What is the straight-through processing (STP) rate?
Select an option first.
Correct answer: C — 92%
Explanation: The STP rate equals transactions processed without intervention divided by total transactions: 4,600 / 5,000 = 0.92, or 92%. Tracking STP rates helps treasury identify exception-prone processes to automate further.
Question 42
A company holds an average collected balance of $3,000,000. The reserve requirement is 10%, the ECR is 1.20% annual, and the analysis period is a 31-day month (365-day year). What is the earnings credit allowance for the month?
Select an option first.
Correct answer: C — $2,751.78
Explanation: Investable balance = $3,000,000 x (1 - 0.10) = $2,700,000. Earnings credit = $2,700,000 x 0.012 x (31/365) = $2,700,000 x 0.012 x 0.084932 = $2,751.78. The reserve requirement reduces the balance eligible to earn the credit.
Question 43
A company's monthly bank service charges are $4,000. The ECR is 1.80% annual with no reserve requirement, over a 30-day month (365-day year). What average collected balance is required to fully offset the charges?
Select an option first.
Correct answer: D — $2,703,704
Explanation: Required balance = fees / (ECR x days/365) = $4,000 / (0.018 x 30/365) = $4,000 / (0.018 x 0.082192) = $4,000 / 0.00147945 = $2,703,704. This is the collected balance whose earnings credit exactly equals the monthly charges.
Question 44
A bank's account analysis shows gross service charges of $6,500 for the month and an earnings credit of $4,200. What is the net service charge the company must settle in hard dollars?
Select an option first.
Correct answer: A — $2,300
Explanation: Net service charge = gross charges - earnings credit = $6,500 - $4,200 = $2,300. When the earnings credit is less than gross charges, the shortfall is billed as a hard-dollar (cash) fee.
Question 45
An account has an average ledger balance of $1,500,000 and average float (uncollected funds) of $250,000. What is the average collected (available) balance used in the earnings credit calculation?
Select an option first.
Correct answer: C — $1,250,000
Explanation: Collected balance = ledger balance - float = $1,500,000 - $250,000 = $1,250,000. Only collected (available) funds, not funds still in the process of collection, are eligible to earn the credit.
Question 46
An account has an average collected balance of $5,000,000 and the bank applies a 10% reserve requirement. What is the investable balance eligible to earn the earnings credit?
Select an option first.
Correct answer: D — $4,500,000
Explanation: Investable balance = collected balance x (1 - reserve requirement) = $5,000,000 x (1 - 0.10) = $4,500,000. The reserve requirement portion of balances is set aside and does not earn the credit.
Question 47
Monthly service charges are $3,000. The ECR is 2.00% annual, the reserve requirement is 10%, and the month has 30 days (365-day year). What average collected balance is needed to fully offset the charges?
Select an option first.
Correct answer: B — $2,027,778
Explanation: Required collected balance = fees / [(1 - reserve) x ECR x days/365] = $3,000 / (0.90 x 0.02 x 30/365) = $3,000 / (0.90 x 0.02 x 0.082192) = $3,000 / 0.00147945 = $2,027,778. Grossing up for the 10% reserve raises the balance needed.
Question 48
During a month a company used 5,000 ACH credits at $0.10 each, 40 wire transfers at $8.00 each, and 2,000 deposited checks at $0.05 each. What are the total per-item service charges?
Select an option first.
Correct answer: C — $920
Explanation: ACH: 5,000 x $0.10 = $500; wires: 40 x $8.00 = $320; checks: 2,000 x $0.05 = $100. Total = $500 + $320 + $100 = $920. Account analysis statements build the total charge by multiplying each service volume by its unit price.
Question 49
Monthly service charges are $10,000. The ECR is 1.50% annual, the reserve requirement is 10%, and the month has 30 days (365-day year). What average collected balance is required to fully offset the charges?
Select an option first.
Correct answer: A — $9,012,346
Explanation: Required collected balance = fees / [(1 - reserve) x ECR x days/365] = $10,000 / (0.90 x 0.015 x 30/365) = $10,000 / (0.0135 x 0.082192) = $10,000 / 0.00110959 = $9,012,346. The lower ECR requires a larger balance than a higher ECR would.
Question 50
Provider A offers a flat $2,750 per month. Provider B charges a $2,000 base fee plus $0.04 per item; the company processes 25,000 items monthly. Which provider is cheaper, and by how much per month?
Select an option first.
Correct answer: C — Provider A, by $250
Explanation: Provider B's cost = $2,000 + (25,000 x $0.04) = $2,000 + $1,000 = $3,000, while Provider A is a flat $2,750. Provider A is therefore cheaper by $3,000 - $2,750 = $250 per month. At this volume the flat fee beats the base-plus-per-item structure.
Question 51
A bank's wire pricing is tiered: the first 100 wires per month cost $10 each and every wire above 100 costs $7 each. If the company sends 250 wires in a month, what is the total wire cost?
Select an option first.
Correct answer: C — $2,050
Explanation: First 100 wires: 100 x $10 = $1,000; remaining 150 wires: 150 x $7 = $1,050. Total = $1,000 + $1,050 = $2,050. Tiered pricing rewards higher volume with lower marginal unit costs.
Question 52
Pricing Option 1 is a flat $1,500 per month. Option 2 is $500 per month plus $0.05 per item. At how many items per month do the two options cost the same?
Select an option first.
Correct answer: D — 20,000 items
Explanation: Set the costs equal: $1,500 = $500 + $0.05 x N, so $0.05 x N = $1,000 and N = 20,000 items. Below 20,000 items Option 2 is cheaper; above it, the flat fee of Option 1 wins.
Question 53
A project generates net operating income (cash available for debt service) of $1,200,000 and has annual debt service of $800,000. What is the debt service coverage ratio (DSCR)?
Select an option first.
Correct answer: B — 1.50
Explanation: DSCR = cash available for debt service / debt service = $1,200,000 / $800,000 = 1.50. A DSCR of 1.50 means the project generates 1.5 times the cash needed to cover its debt payments, providing a comfortable cushion.
Question 54
A company's capital structure is 40% debt at an after-tax cost of 5% and 60% equity at a cost of 10%. What is the weighted average cost of capital (WACC)?
Select an option first.
Correct answer: A — 8.0%
Explanation: WACC = (weight of debt x cost of debt) + (weight of equity x cost of equity) = (0.40 x 5%) + (0.60 x 10%) = 2.0% + 6.0% = 8.0%. This blended rate reflects the proportional cost of each financing source.
Question 55
A bank's nostro statement from its correspondent shows a balance of $2,350,000, while the bank's own ledger shows $2,300,000. Investigation reveals a $50,000 credit received by the correspondent that the bank has not yet recorded. After recording it, what is the reconciling difference?
Select an option first.
Correct answer: C — $0
Explanation: The $50,000 unrecorded credit fully explains the gap between the correspondent's $2,350,000 and the bank's $2,300,000. Once the bank records the credit, its ledger becomes $2,350,000, matching the correspondent, so the reconciling difference is $0.
Question 56
A company must buy EUR 500,000. The bank quotes 1.1000 USD per EUR, while the mid-market rate is 1.0950 USD per EUR. What is the cost of the bank's spread on this transaction in USD?
Select an option first.
Correct answer: D — $2,500
Explanation: The spread per euro is 1.1000 - 1.0950 = 0.0050 USD. On EUR 500,000 the cost of the spread is 500,000 x 0.0050 = $2,500. This spread is the implicit cost of the bank's FX conversion above the mid-market rate.
Question 57
A cross-border wire of $100,000 passes through the payment chain, where the originating bank deducts a $30 fee and two intermediary (correspondent) banks each deduct a $25 lifting fee. How much does the beneficiary receive?
Select an option first.
Correct answer: A — $99,920
Explanation: Total deductions = $30 + $25 + $25 = $80. Beneficiary receives $100,000 - $80 = $99,920. Correspondent (lifting) fees deducted along the payment chain reduce the amount ultimately credited, a common issue in international payments.
Question 58
A company's average ledger balance is $4,000,000 with average float of $600,000 and a 12% reserve requirement. What is the investable balance eligible to earn the earnings credit?
Select an option first.
Correct answer: B — $2,992,000
Explanation: First subtract float to get the collected balance: $4,000,000 - $600,000 = $3,400,000. Then apply the reserve requirement: $3,400,000 x (1 - 0.12) = $3,400,000 x 0.88 = $2,992,000. Both float and the reserve reduce the balance that earns the credit.
Question 59
A company runs treasury functionality within its ERP treasury module rather than a standalone TMS. A key trade-off of this approach is that the ERP module typically offers:
Select an option first.
Correct answer: B — Deeper native integration with the general ledger but sometimes less specialized treasury functionality
Explanation: An ERP-embedded treasury module offers tight, native integration with accounting and procurement data, easing reconciliation and reducing interfaces. However, it may lack some of the specialized, best-of-breed capabilities (advanced forecasting, hedge accounting, multi-bank connectivity) found in dedicated TMS platforms.
Question 60
A multinational wants a single, standardized channel to connect its TMS to many banks worldwide instead of maintaining separate proprietary links. The MOST appropriate solution is:
Select an option first.
Correct answer: D — Connectivity through the SWIFT network (for example via a service bureau or Alliance)
Explanation: SWIFT provides a secure, standardized, bank-agnostic network so a corporate can reach many banks through one connection rather than numerous proprietary host-to-host links. Corporations commonly access it via a service bureau or SWIFT connectivity offering integrated with their TMS.
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