Certified Treasury Professional Exam Short-Term Investing and Borrowing

Question 1

Which money market instrument is an unsecured, short-term debt obligation issued by highly rated corporations to fund immediate operating needs?

Accepted Answer

Commercial paper

Answer

Treasury bill

Answer

Banker's acceptance

Answer

Repurchase agreement

Question 2

A repurchase agreement (repo) is best described as:

Accepted Answer

A sale of securities with an agreement to repurchase them at a higher price

Answer

An unsecured interbank loan

Answer

A long-term secured bond issuance

Answer

A revolving credit facility with a bank

Question 3

The SEC Rule 2a-7 primarily governs which short-term investment vehicle?

Accepted Answer

Money market mutual funds

Answer

Treasury bills

Answer

Banker's acceptances

Answer

Eurodollar deposits

Question 4

Which metric measures the weighted average time until a money market fund's portfolio securities mature or are repriced, reflecting interest rate sensitivity?

Accepted Answer

Weighted average maturity (WAM)

Answer

Duration to worst

Answer

Modified duration

Answer

Weighted average life (WAL)

Question 5

A treasury manager investing in Treasury bills at a bank discount yield of 4.5% for 91 days would calculate the bond-equivalent yield (BEY) using a day count of:

Accepted Answer

365 days

Answer

360 days

Answer

252 days

Answer

300 days

Question 6

Which short-term borrowing facility allows a company to issue commercial paper directly to investors while a bank provides a backstop line of credit?

Accepted Answer

Asset-backed commercial paper conduit

Answer

Committed credit facility

Answer

Syndicated term loan

Answer

Extendible commercial paper program