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Free Questions › CTP › Treasury Technology and Payment Systems
Free CTP Treasury Technology and Payment Systems Practice Questions & Answers
150 exam-style Treasury Technology and Payment Systems questions. Pick your answer, hit Check answer, and see the worked solution — free to start, no signup.
100% free · No login to startQuestion 31
Electronic bank account management (eBAM) is used to:
Select an option first.
Correct answer: B — Digitally manage the opening, closing, and maintenance of bank accounts and signatories
Explanation: eBAM digitizes and streamlines the administrative processes of opening, closing, and modifying bank accounts and managing authorized signatories, often using standardized electronic messages. It reduces paperwork and improves audit trails and control. It is not a check-printing, trading, or email-encryption tool.
Question 32
A BAI2 file is primarily a:
Select an option first.
Correct answer: C — Bank reporting format for transmitting balance and transaction information to a company
Explanation: BAI2 (Bank Administration Institute format, version 2) is a widely used cash-management reporting format banks use to deliver prior-day and intraday balance and transaction data to corporate customers for cash positioning and reconciliation. It reports information rather than initiating payments, and it is not a contract or marketing document.
Question 33
A SWIFT MT940 message is used to convey:
Select an option first.
Correct answer: D — A customer statement with end-of-day balance and transaction detail
Explanation: The MT940 is a SWIFT customer statement message that delivers end-of-day account balance and transaction detail from a bank to an account holder, commonly used for reconciliation and cash reporting. It is a reporting message, not a chat, shipment, or purchase-order document.
Question 34
Which SWIFT message provides intraday transaction reporting to help with same-day cash positioning?
Select an option first.
Correct answer: A — MT942 (interim transaction report)
Explanation: The MT942 is an interim transaction report that delivers intraday movements between full statements, supporting same-day cash positioning. The MT103 is a payment instruction, the MT101 is a request for transfer, and the MT300 confirms FX trades, none of which are intraday reporting statements.
Question 35
Prior-day bank reporting is most useful to a treasurer for:
Select an option first.
Correct answer: B — Reconciling the previous day's activity and confirming closing balances
Explanation: Prior-day reporting delivers the previous business day's finalized transactions and closing balances, which supports reconciliation and confirmation of the starting position for the current day. Real-time intraday actions require intraday reporting instead. It has no role in stock prediction or badge printing.
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Question 36
A key benefit of eBAM over paper-based bank account management is:
Select an option first.
Correct answer: C — A centralized, auditable digital record of accounts and signatories
Explanation: eBAM provides a centralized, standardized, and auditable electronic record of bank accounts, mandates, and authorized signatories, improving control, transparency, and processing speed over paper-based methods. It does not eliminate bank relationships or affect interest rates, and it reduces rather than increases manual effort.
Question 37
An application programming interface (API) in banking allows:
Select an option first.
Correct answer: B — Two software systems to communicate and exchange data directly in a defined way
Explanation: An API defines a standardized way for two software systems, such as a corporate TMS and a bank platform, to communicate and exchange data programmatically, often in real time. It enables automation and integration. It does not handle paper or physical cash and does not exempt banks from regulation.
Question 38
Distributed ledger technology (DLT), including blockchain, is characterized by:
Select an option first.
Correct answer: C — A shared, synchronized ledger replicated across multiple participants
Explanation: Distributed ledger technology maintains a shared, synchronized record of transactions replicated across multiple participants or nodes, often secured cryptographically, rather than relying on a single central copy. This can improve transparency and resilience. It is neither a single central database nor a paper-based system.
Question 39
Robotic process automation (RPA) in treasury is best used to:
Select an option first.
Correct answer: D — Automate repetitive, rule-based tasks such as data entry and reconciliation steps
Explanation: RPA uses software robots to automate repetitive, rule-based, high-volume tasks such as data extraction, re-keying, and routine reconciliation steps, freeing staff for higher-value work. It handles structured, deterministic processes rather than making unsupervised strategic decisions or moving physical cash.
Question 40
A smart contract on a distributed ledger is:
Select an option first.
Correct answer: A — Self-executing code that automatically enforces the terms of an agreement when conditions are met
Explanation: A smart contract is self-executing program code stored on a distributed ledger that automatically performs actions or enforces terms when predefined conditions are satisfied. It removes the need for manual intervention to execute the agreed logic. It is not a verbal agreement, paper document, or brochure.
Question 41
How is artificial intelligence (AI) increasingly applied in treasury operations?
Select an option first.
Correct answer: B — To enhance cash-flow forecasting and detect anomalous or fraudulent transactions
Explanation: AI and machine learning are applied in treasury to improve cash-flow forecasting accuracy, detect anomalies and potential fraud in payment patterns, and support decision-making by analyzing large data sets. These are analytical and predictive uses; AI does not eliminate bank accounts or print currency.
Question 42
An MT103 message in the SWIFT network is used to:
Select an option first.
Correct answer: A — Instruct a single customer credit transfer (a payment)
Explanation: The MT103 is a single customer credit transfer message used to instruct the movement of funds from a payer to a beneficiary across correspondent banks. It is a payment instruction, distinct from statement messages (MT940/MT942) and FX confirmations (MT300).
Question 43
An audit trail (transaction log) in a treasury system supports security by:
Select an option first.
Correct answer: B — Recording who did what and when, enabling detection and investigation of unauthorized activity
Explanation: An audit trail captures a chronological record of user and system actions, including who initiated, approved, or changed transactions and when, which supports monitoring, accountability, and investigation of suspicious or unauthorized activity. It does not approve transactions, conceal actions, or encrypt marketing content.
Question 44
A company processes 400 supplier payments per month. Executing them as wires costs $22 each; executing them via ACH costs $0.30 each. What is the approximate monthly savings from moving all these payments from wire to ACH?
Select an option first.
Correct answer: B — $8,680
Explanation: Per-payment savings equal $22.00 minus $0.30, or $21.70. Multiplied by 400 payments: 400 x $21.70 = $8,680 per month. The distractors ignore the ACH cost or use rounded per-unit figures.
Question 45
A TMS implementation costs $180,000 up front and is expected to save $7,500 per month in labor and error-reduction benefits. Ignoring the time value of money, what is the simple payback period?
Select an option first.
Correct answer: C — 24 months
Explanation: Simple payback equals initial cost divided by monthly savings: $180,000 / $7,500 = 24 months. This ignores discounting, as specified. The other options do not satisfy the division.
Question 46
A company writes a $3,000,000 check with an expected disbursement float of 4 days. If the firm's opportunity cost of funds is 5% per year (365-day basis), what is the approximate value of that disbursement float?
Select an option first.
Correct answer: B — $1,644
Explanation: Daily opportunity value is $3,000,000 x 0.05 / 365 = $410.96 per day. Over 4 days of float: $410.96 x 4 = $1,643.84, or approximately $1,644. The distractors use the wrong number of days or a misplaced decimal.
Question 47
A retailer processes a $200 card sale. The card network charges 2.4% plus a $0.15 per-transaction fee. What is the total processing cost of this transaction?
Select an option first.
Correct answer: C — $4.95
Explanation: The percentage fee is 2.4% of $200 = $4.80. Adding the flat $0.15 per-transaction fee gives $4.80 + $0.15 = $4.95. Option A omits the flat fee and option D counts only the flat fee.
Question 48
A firm can pay a vendor either by wire at $18.00 or by Same Day ACH at $1.25. If it makes 250 such payments monthly, what is the annual savings from choosing Same Day ACH?
Select an option first.
Correct answer: D — $50,250.00
Explanation: Per-payment savings equal $18.00 minus $1.25 = $16.75. Monthly savings: 250 x $16.75 = $4,187.50. Annual savings: $4,187.50 x 12 = $50,250.00. Option A is only the monthly figure and C understates the annual total.
Question 49
A lockbox service reduces mail and processing float by 1.5 days on average daily receipts of $800,000. At an annual investment rate of 4% (360-day basis), what is the approximate daily value of the float reduction?
Select an option first.
Correct answer: A — $133.33
Explanation: Accelerated collections free up 1.5 days x $800,000 = $1,200,000 of funds. The daily earnings on that amount are $1,200,000 x 0.04 / 360 = $133.33. Option B omits the 1.5-day multiplier and option C is the freed principal rather than its daily earnings.
Question 50
A company sends 1,200 cross-border payment messages per month. A bank API solution costs a flat $900 per month, while a legacy per-message channel costs $1.10 per message. How much does the company save monthly by switching to the API?
Select an option first.
Correct answer: C — $420
Explanation: The legacy channel costs 1,200 x $1.10 = $1,320 per month. The API costs a flat $900. Monthly savings equal $1,320 minus $900 = $420. Option A is the legacy cost and B is the API cost, not the savings.
Question 51
An IBAN validation reduces failed cross-border payments. A firm makes 5,000 cross-border payments monthly; without validation, 1.2% fail and each failure costs $40 in repair. If validation cuts the failure rate to 0.2%, what is the monthly cost reduction?
Select an option first.
Correct answer: D — $2,000
Explanation: Before validation, failures = 5,000 x 1.2% = 60, costing 60 x $40 = $2,400. After validation, failures = 5,000 x 0.2% = 10, costing 10 x $40 = $400. The reduction is $2,400 minus $400 = $2,000. Option C is the pre-validation cost only.
Question 52
A company faces a payment-fraud risk with an estimated annual loss of $250,000. A control costing $60,000 per year is expected to reduce that expected loss by 80%. What is the net annual benefit of implementing the control?
Select an option first.
Correct answer: B — $140,000
Explanation: The control reduces expected loss by 80% of $250,000 = $200,000 of avoided loss. Subtracting the $60,000 control cost gives a net annual benefit of $200,000 minus $60,000 = $140,000. Option A is the gross avoided loss before deducting the control cost.
Question 53
A firm estimates the annualized rate of occurrence (ARO) of a successful phishing-driven fraud at 0.5 events per year, with a single-loss expectancy (SLE) of $300,000. What is the annualized loss expectancy (ALE)?
Select an option first.
Correct answer: C — $150,000
Explanation: Annualized loss expectancy equals single-loss expectancy multiplied by the annualized rate of occurrence: $300,000 x 0.5 = $150,000. Option B ignores the frequency factor and option D doubles it.
Question 54
A cloud TMS subscription costs $4,000 per month. It replaces an on-premise system with $70,000 in annual maintenance plus $2,000 per month in internal IT support. What is the annual cost difference (positive means the cloud option is cheaper)?
Select an option first.
Correct answer: A — $46,000 cheaper
Explanation: On-premise annual cost is $70,000 maintenance plus 12 x $2,000 = $24,000 support, totaling $94,000. Cloud annual cost is 12 x $4,000 = $48,000. The difference is $94,000 minus $48,000 = $46,000 in favor of the cloud option. Option B omits the internal IT support in the comparison.
Question 55
A company maintains bank connectivity to 8 banks via proprietary links costing $1,500 per bank per year. Consolidating onto a single SWIFT channel costs $9,000 per year total. What is the annual savings from consolidation?
Select an option first.
Correct answer: D — $3,000
Explanation: The proprietary links cost 8 x $1,500 = $12,000 per year. The consolidated SWIFT channel costs $9,000 per year. Savings equal $12,000 minus $9,000 = $3,000. Option C is the total proprietary cost before consolidation.
Question 56
A treasury analyst spends 3 hours per day manually consolidating bank statements from 6 banks. Automating BAI2 imports into the TMS is expected to cut this to 30 minutes per day. Over 250 working days, how many analyst hours are saved annually?
Select an option first.
Correct answer: A — 625 hours
Explanation: Daily time saved is 3 hours minus 0.5 hours = 2.5 hours. Over 250 working days: 2.5 x 250 = 625 hours saved annually. Option C incorrectly assumes all 3 hours are eliminated.
Question 57
An RPA bot processes reconciliations at $0.05 each after a $10,000 build cost. The manual process costs $2.05 per reconciliation. At 20,000 reconciliations per year, what is the first-year net savings from the bot (including the build cost)?
Select an option first.
Correct answer: B — $30,000
Explanation: Per-item savings equal $2.05 minus $0.05 = $2.00. Annual gross savings: 20,000 x $2.00 = $40,000. Subtracting the one-time $10,000 build cost gives first-year net savings of $40,000 minus $10,000 = $30,000. Option A omits the build cost.
Question 58
A firm evaluates an AI cash-forecasting tool costing $25,000 per year that is expected to reduce idle cash by $1,500,000, which can then be invested at 3% annually. What is the net annual benefit of adopting the tool?
Select an option first.
Correct answer: C — $20,000
Explanation: Investing the $1,500,000 of freed idle cash at 3% earns $1,500,000 x 0.03 = $45,000 per year. Subtracting the tool's $25,000 annual cost gives a net annual benefit of $45,000 minus $25,000 = $20,000. Option B is the gross investment income before deducting the tool cost.
Question 59
A firm currently mails 2,000 supplier checks per month at a fully loaded cost of $2.75 each. Converting to ACH would cost $0.35 each plus a fixed $500 monthly platform fee. What is the monthly savings from converting all payments to ACH?
Select an option first.
Correct answer: D — $4,300
Explanation: Check cost is 2,000 x $2.75 = $5,500 per month. ACH cost is 2,000 x $0.35 = $700 plus the $500 platform fee = $1,200 per month. Savings equal $5,500 minus $1,200 = $4,300. Option B ignores the platform fee.
Question 60
Why might a company implement a payment factory alongside its TMS?
Select an option first.
Correct answer: C — To centralize and standardize payment processing across entities, improving control and reducing bank fees
Explanation: A payment factory centralizes and standardizes outbound payment processing across multiple entities, enabling consistent formats, consolidated bank connectivity, stronger controls, and reduced per-transaction and banking costs. It is a centralization strategy, the opposite of decentralizing to local banks. It strengthens rather than removes approval controls.
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