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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 91
Which document set is MOST commonly required to open a new corporate bank account?
Select an option first.
Correct answer: B — Formation documents, tax identification number, and authorized signatory information
Explanation: Banks typically require entity formation documents, a tax identification number (such as an EIN), a banking resolution, and signatory identification to satisfy KYC and open the account. These establish the entity's legal existence and who is authorized to act.
Question 92
A U.S. company with signature authority over foreign bank accounts exceeding the reporting threshold may be required to file which report?
Select an option first.
Correct answer: D — A Report of Foreign Bank and Financial Accounts (FBAR)
Explanation: U.S. persons with a financial interest in or signature authority over foreign financial accounts whose aggregate value exceeds the regulatory threshold must file an FBAR annually. Treasury must track foreign accounts and signatories to ensure compliance.
Question 93
A signature card maintained by a bank is used to:
Select an option first.
Correct answer: B — Record the specimen signatures of individuals authorized on an account
Explanation: A signature card captures the specimen signatures of authorized parties so the bank can verify the authenticity of instructions. It is a fundamental control document in account administration, though increasingly supplemented or replaced by electronic mandates.
Question 94
A bank account analysis statement primarily provides a company with:
Select an option first.
Correct answer: D — A detailed itemization of services used, volumes, per-item charges, balances, and earnings credit for the period
Explanation: The account analysis statement itemizes the services a company used during the period, the volumes and unit prices, balance information, and any earnings credit applied against charges. Treasury uses it to verify billing accuracy and manage bank fees.
Question 95
AFP Service Codes are used to:
Select an option first.
Correct answer: A — Provide a standardized coding system for bank services so charges can be compared across banks
Explanation: AFP Service Codes are a standardized, industry-wide taxonomy that maps individual bank services to common codes, enabling apples-to-apples comparison of billing across different banks. They greatly simplify analyzing and benchmarking account analysis statements.
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Question 96
The earnings credit rate (ECR) on an analyzed account is best described as:
Select an option first.
Correct answer: B — A notional rate applied to collected balances to generate credits that offset bank service charges
Explanation: The ECR is a soft-dollar rate the bank applies to a customer's investable (collected) balances to produce an earnings credit that offsets eligible service charges. Unlike interest, the credit generally cannot exceed fees and is not paid out in cash.
Question 97
An analyzed (analysis) account differs from a standard interest-bearing account in that it:
Select an option first.
Correct answer: B — Applies an earnings credit on balances to offset service charges rather than paying cash interest
Explanation: An analyzed account uses the earnings credit mechanism, applying a notional rate to balances to offset fees, and is common for corporate operating accounts. A standard interest-bearing account instead pays out cash interest on balances.
Question 98
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.
Question 99
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 100
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 101
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 102
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 103
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 104
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 105
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 106
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 107
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 108
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 109
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 110
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 111
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 112
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 113
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 114
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 115
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 116
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.
Question 117
Straight-through processing (STP) in a treasury payment workflow is best characterized by:
Select an option first.
Correct answer: B — Electronic processing of a transaction from initiation to settlement without manual intervention
Explanation: STP means a transaction flows electronically through initiation, approval, transmission, and settlement without manual re-entry, reducing errors, cost, and processing time. High STP rates are a common efficiency objective for treasury operations.
Question 118
A company weighing a cloud-based (SaaS) TMS against an on-premise installed system should recognize that the SaaS model generally offers:
Select an option first.
Correct answer: D — Faster implementation and vendor-managed hosting and upgrades, with recurring subscription cost
Explanation: SaaS treasury systems are hosted and maintained by the vendor, typically enabling quicker deployment and automatic upgrades in exchange for ongoing subscription fees and reliance on the provider. On-premise systems offer more control and customization but require internal IT support and capital investment.
Question 119
Under customer due diligence rules, a bank opening an account for a corporation is generally required to identify and verify:
Select an option first.
Correct answer: D — The beneficial owners and controlling persons of the legal entity
Explanation: Customer due diligence and beneficial ownership rules require banks to identify natural persons who own or control a legal entity customer above defined thresholds and a person with significant management control. This transparency helps prevent misuse of accounts for illicit purposes.
Question 120
Electronic Bank Account Management (eBAM) is designed primarily to:
Select an option first.
Correct answer: C — Digitize and automate the opening, maintenance, and closing of bank accounts and signatory changes
Explanation: eBAM streamlines the traditionally paper-intensive account lifecycle by electronically exchanging standardized messages for opening, modifying, and closing accounts and updating mandates. It improves control, audit trails, and turnaround time for account administration.
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