FREE CTP Certification Questions And Answers

Question 1

An agreement that grants the right to purchase a certain quantity of common shares at a particular price is referred to as:

Accepted Answer

an equity warrant

Answer

a subordinated debenture

Answer

a put option

Answer

a zero coupon bond

Question 2

A corporation needs to issue loans at a low interest rate now but wants to issue further equity during the following 12 months. Which of the following tools would best achieve this goal?

Accepted Answer

Convertible bonds

Answer

Preferred stock

Answer

Subordinated debentures

Answer

Private placement issue

Question 3

A loan agreement is one in which the borrower agrees to make regular payments to a different custodial account for the purpose of repaying the debt.

Accepted Answer

sinking fund

Answer

zero-coupon bond

Answer

balloon payment

Answer

mortgage

Question 4

Which of the following devices makes loan documentation for various advance features simpler?

Accepted Answer

Master note

Answer

Indenture agreement

Answer

Note purchase agreement

Answer

Banker's acceptance

Question 5

Which of the following international cash management strategies involves transferring ownership of the items when they are sold between companies?

Accepted Answer

Re-invoicing

Answer

Multilateral netting

Answer

Pooling

Answer

Internal factoring

Question 6

An ordinary swap transaction involves two parties agreeing to trade:

Accepted Answer

cash flows at future points in time.

Answer

notional principal amounts.

Answer

amortization schedules.

Answer

maturity dates of obligations.

Question 7

The price volatility of pork belly is causing anxiety for a Chicago-area meat processor. Which derivative product from the list below would be used to set these prices within a certain range?

Accepted Answer

Collar

Answer

Cap

Answer

Spot purchase

Answer

Swap