CTP Stakeholder Relationship Management 3

Question 1

Which of the following BEST describes the concept of 'relationship banking' from a CTP perspective?

Accepted Answer

A strategic, long-term partnership where the bank provides services beyond pure transactions in exchange for wallet share

Answer

Relationship banking involves a strategic exchange: the company provides wallet share and multiple business lines in return for credit availability, pricing advantages, and advisory services.

Question 2

A treasury manager discovers that covenant compliance for the revolving credit facility will be breached next quarter due to an acquisition. The FIRST action should be:

Accepted Answer

Proactively contact the lenders to disclose the anticipated breach and negotiate a waiver or amendment

Answer

Proactive disclosure of anticipated covenant breaches preserves trust with lenders and provides the best opportunity to negotiate a waiver before default occurs.

Question 3

In treasury stakeholder management, the term 'wallet share' refers to:

Accepted Answer

The proportion of a company's banking business allocated to a particular bank

Answer

Wallet share is the fraction of total banking business (deposits, loans, FX, payments) that a company allocates to a specific bank, used as leverage in relationship negotiations.

Question 4

Which treasury activity requires the MOST coordination with the accounting and controller functions?

Accepted Answer

Financial covenant compliance monitoring and external reporting

Answer

Covenant compliance requires coordinated effort between treasury and accounting to ensure reported financial ratios accurately reflect loan agreement definitions.

Question 5

A company is considering switching its primary banking partner. Which factor should weigh MOST heavily in the decision?

Accepted Answer

The potential loss of credit availability and existing credit facility terms

Answer

Switching primary banks risks losing committed credit facilities and relationship-based credit terms that may not be replicated immediately by a new banking partner.

Certified Treasury Professional Exam Practice Test

Certified Treasury Professional Exam Practice Test

CTP Stakeholder Relationship Management 3