Ctp-5 Practice: Test Pdf

Which internal control best mitigates the risk of a rogue employee initiating a fraudulent wire transfer? A) Requiring manager approval for all wires above a de minimis threshold B) Reconciling bank statements only at year-end C) Using only physical signatures for all payments D) Granting the same employee authority to initiate, approve, and reconcile wires

A treasurer uses a forecast error analysis and finds a Mean Absolute Deviation (MAD) of $500,000. If the company holds a buffer of 2x MAD, what is the required safety stock of cash? A) $250,000 B) $500,000 C) $1,000,000 D) $2,000,000 Ctp-5 Practice Test Pdf

A company issues commercial paper (CP). What is a typical requirement for CP issuance? A) Secured by physical assets B) A committed bank backup line of credit C> A maturity longer than 5 years D> Approval from the SEC for every issuance Which internal control best mitigates the risk of

C Rationale: ZBAs sweep funds from subsidiary accounts to a master account, allowing centralized control and maximizing investment opportunities or reducing overdrafts. A) $250,000 B) $500,000 C) $1,000,000 D) $2,000,000

A ($2M surplus) Rationale: Net = ($10M + $15M - $18M) = $7M available. Subtract $5M reserve = $2M surplus liquidity.

C Rationale: The company needs to buy euros in the future. A long forward contract locks in the exchange rate today, eliminating the risk of a stronger euro.