CBP Cheat Sheet 2026

The 30 highest-yield CBP facts, distilled from real exam questions. Print it, save it as a PDF, or study it here — free, no sign-up.

1. Which inter-governmental body sets the global standards for combating money laundering and terrorist financing, famously known for its "40 Recommendations"? → The Financial Action Task Force (FATF)
2. Which market serves as a primary venue for banks to issue and trade short-term debt instruments with maturities of one year or less? → Money market
3. A financial covenant in a corporate loan agreement typically requires the borrower to: → Maintain certain financial ratios such as a minimum debt service coverage ratio
4. What type of risk arises from failures in internal processes or systems? → Operational risk
5. What is the primary purpose of a 'will' in estate planning services offered by banks? → To legally specify how a person's assets should be distributed after death
6. Why is credit scoring important in financial institutions? → To assess borrower risk efficiently
7. Which type of account typically offers the highest interest rate? → Certificate of Deposit (CD)
8. Asset-based lending (ABL) determines loan availability primarily based on: → The liquidation value of eligible collateral assets such as receivables and inventory
9. Which regulation is designed to combat money laundering activities? → Anti-Money Laundering (AML)
10. Which regulatory body oversees investment advisers and broker-dealers in the United States? → Securities and Exchange Commission (SEC)
11. Mezzanine financing in the corporate capital structure is best described as: → A hybrid instrument combining features of debt and equity, subordinated to senior debt
12. A standby letter of credit (SBLC) in commercial banking primarily serves as: → A guarantee of payment if the applicant fails to fulfill a contractual obligation
13. Which valuation method in investment banking calculates a company's value based on applying an industry multiple to its earnings (e.g., EBITDA)? → Comparable company analysis (Comps)
14. Working capital loans are primarily designed to finance: → Day-to-day operational needs such as inventory purchases and accounts receivable cycles
15. What is a 'discretionary' wealth management account? → An account where the manager can make investment decisions without prior client approval
16. What does the term 'liquidity' refer to in banking? → The ease of converting assets to cash
17. Under the Basel III framework, operational risk is defined as the risk of loss resulting from what? → Inadequate or failed internal processes, people, and systems, or from external events.
18. What is the primary role of a bank's operations department? → Managing transaction processing
19. What is the role of collateral in credit management? → To secure the loan against default
20. A term loan in corporate banking is best characterized by: → A fixed or variable rate with a defined repayment schedule and maturity date
21. Which of the following is a primary objective of implementing a robust liquidity risk management framework in a bank? → To ensure the bank can meet its financial obligations as they come due.
22. Retail banking, also known as consumer or personal banking, primarily serves which type of client? → Individual members of the general public
23. What is typically included in a bank's core banking system? → Loan and deposit processing modules
24. Which financial statement shows a company’s financial position at a specific point in time? → Balance sheet
25. A revolving credit facility differs from a term loan primarily because it: → Allows the borrower to draw, repay, and redraw funds up to a set credit limit
26. A Debt Service Coverage Ratio (DSCR) of 1.25x means the borrower: → Generates $1.25 of operating income for every $1.00 of required debt service payments
27. In a syndicated loan, why do multiple banks collectively fund a single loan to one borrower? → To share credit risk and large loan exposure across multiple institutions
28. Which of the following is a primary requirement of the Gramm-Leach-Bliley Act (GLBA) Safeguards Rule for financial institutions? → To develop, implement, and maintain a comprehensive written information security program.
29. A credit rating assigned to a corporation by Moody's or S&P primarily indicates: → The agency's assessment of the likelihood the company will default on its debt obligations
30. What is the main risk associated with credit card lending by banks? → Credit risk