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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 151
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 152
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 153
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 154
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 155
In negotiating cash management pricing, the difference between bundled and unbundled pricing is that:
Select an option first.
Correct answer: A — Unbundled pricing itemizes each service separately while bundled combines multiple services into a single fee
Explanation: Unbundled pricing charges for each service individually, providing transparency and easier benchmarking, while bundled pricing groups services into one combined charge. Treasury should understand which model applies to compare providers accurately and detect hidden costs.
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Question 156
An indemnification clause in a bank service agreement most directly addresses:
Select an option first.
Correct answer: D — Which party bears responsibility and financial liability for specified losses, claims, or damages
Explanation: Indemnification and liability clauses allocate responsibility for losses, third-party claims, and damages between the company and the provider, and often cap or limit liability. Treasury and legal must scrutinize these terms because they determine financial exposure when errors or breaches occur.
Question 157
A well-negotiated termination provision in a treasury services contract should ensure the company can:
Select an option first.
Correct answer: B — Exit within a defined notice period and obtain cooperation for orderly transition of services and data
Explanation: Effective termination clauses give the company the right to exit on reasonable notice and require the provider to support an orderly transition, including returning or transferring data and continuing services during handover. This prevents disruptive lock-in and protects continuity of operations.
Question 158
In a typical non-recourse or limited-recourse project financing, the sponsors' exposure is:
Select an option first.
Correct answer: C — Generally limited to their investment in the project, with lenders having little or no claim on the sponsors' other assets
Explanation: Non-recourse (or limited-recourse) structures confine lenders' claims largely to the project entity's cash flows and assets, so sponsors risk mainly their equity investment. This ring-fencing is a defining feature that isolates project risk from the sponsors' other operations.
Question 159
Lenders in project finance closely monitor the debt service coverage ratio (DSCR) because it measures:
Select an option first.
Correct answer: A — The project's ability to generate enough cash flow to cover its debt service obligations
Explanation: The DSCR compares the cash flow available for debt service to the required principal and interest payments, indicating the cushion available to meet obligations. Lenders set minimum DSCR covenants to ensure the project can service its debt under expected and stressed conditions.
Question 160
When treasury advises on a project using the weighted average cost of capital (WACC) as a hurdle rate, the WACC represents:
Select an option first.
Correct answer: D — The blended after-tax cost of the company's debt and equity financing weighted by their proportions
Explanation: WACC blends the after-tax cost of debt and the cost of equity, each weighted by its share of the capital structure, to express the company's overall required return. Projects expected to earn more than the WACC generally create value, making it a common hurdle rate.
Question 161
Treasury typically works closely with the legal department when:
Select an option first.
Correct answer: A — Reviewing and negotiating banking agreements, ISDA documentation, and financing contracts
Explanation: Legal reviews and negotiates the contractual terms of banking relationships, derivatives (such as ISDA master agreements), loans, and service agreements to manage legal risk. Treasury relies on legal to ensure enforceability and appropriate risk allocation in these documents.
Question 162
Treasury's collaboration with procurement is MOST directly relevant to:
Select an option first.
Correct answer: C — Optimizing supplier payment terms, purchasing card programs, and working capital
Explanation: Procurement negotiates supplier terms and manages purchasing programs that directly affect payables timing, discounts, and working capital, which are central to treasury's liquidity management. Coordinating on payment terms and card programs improves cash flow and capture of early-payment discounts.
Question 163
Effective collaboration between treasury and financial planning and analysis (FP&A) MOST improves:
Select an option first.
Correct answer: A — The accuracy and usefulness of cash flow forecasts by aligning treasury and business assumptions
Explanation: FP&A holds business-driver and budget insight while treasury holds cash timing and liquidity insight; sharing assumptions produces more reliable cash forecasts. Better forecasting improves liquidity planning, investment, and borrowing decisions.
Question 164
Establishing cross-functional governance for a new bank connectivity project is valuable because it:
Select an option first.
Correct answer: C — Brings treasury, IT, accounting, and legal together to align objectives, responsibilities, and controls across the project
Explanation: Cross-functional governance aligns the multiple stakeholders whose systems, controls, and legal terms are affected, ensuring clear ownership, coordinated decisions, and integrated controls. This structure reduces the risk of gaps, rework, and control failures on complex initiatives.
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