Certification Exam Practice Test Questions And

Certified Treasury Professional (CTP) Certification Exam Practice Test Questions And Correct Answers (Verified Answers) Plus Rationales 2026 Q&A | Instant Download Pdf

All subjects covered: Treasury Management, Working Capital, Risk

Management, Corporate Finance, Financial Management, Banking, Investments, and Ethics.

• What is the primary goal of treasury management in an organization?
• To maximize profits
• To ensure tax compliance
• To maintain liquidity and manage financial risks
• To reduce employee turnover

Rationale: Treasury management aims to maintain adequate liquidity,

manage cash flow, and mitigate financial risks to ensure the company’s financial stability.

• / 4

• Which of the following is considered a short-term investment

instrument?

• Corporate bond
• Treasury bill
• Preferred stock
• Convertible bond

Rationale: Treasury bills are short-term debt securities issued by the

government, typically with maturities under one year.

3. A company’s cash conversion cycle is calculated by:

• Inventory days + Payable days – Receivable days
• Receivable days + Payable days – Inventory days
• Inventory days + Receivable days – Payable days
• Inventory days – Payable days + Receivable days

Rationale: The cash conversion cycle measures the time between cash

outflows for production and inflows from sales: CCC = DIO + DSO – DPO.

• Which of the following is a responsibility of a corporate treasurer?
• Managing employee benefits
• Managing liquidity and funding requirements
• Supervising production processes
• Setting sales targets 2 / 4

Rationale: The treasurer oversees liquidity, capital structure, and risk

management to ensure financial efficiency.

• What is the main objective of working capital management?
• To minimize taxation
• To maximize shareholder dividends
• To ensure the firm can meet short-term obligations
• To increase long-term debt

Rationale: Effective working capital management ensures the company

can meet short-term liabilities with its current assets.

• Which of the following is a key component of cash forecasting?
• Cost of capital
• Capital budgeting
• Accounts receivable collections
• Depreciation schedule

Rationale: Cash forecasting relies on expected cash inflows (like

receivables) and outflows (such as payables).

7. In treasury operations, the term “float” refers to:

• Interest earned on idle cash
• The time delay between payment initiation and final settlement 3 / 4

• The cost of funds
• The balance in reserve accounts

Rationale: Float represents the delay between when a payment is initiated

and when funds are actually available or withdrawn.

• What type of risk involves the possibility of a loss from a counterparty’s

failure to meet obligations?

• Operational risk
• Credit risk
• Market risk
• Interest rate risk

Rationale: Credit risk arises when a borrower or counterparty fails to fulfill

contractual payment obligations.

• Which of the following is an example of market risk?
• A supplier failing to deliver raw materials
• Losses due to changes in exchange rates or interest rates
• A system failure disrupting transactions
• A customer defaulting on payment

Rationale: Market risk results from fluctuations in interest rates, foreign

exchange rates, or equity prices.

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