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Exactprep CTP Questions

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Total 932 questions
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Certified Treasury Professional Questions and Answers

Question 81

Which of the following is a source of short-term financing?

Options:

A.

Bond issuance

B.

Factoring of accounts receivable

C.

Issuance of common stock

D.

Retaining profits

Question 82

The combination of difference in condition (DIC) insurance and umbrella insurance:

Options:

A.

transfers risk to a company’s captive insurance subsidiary.

B.

replaces the coverage provided by basic property and liability insurance.

C.

supplements the coverage provided by basic property and liability insurance.

D.

provides payments to a company in the event it is unable to pursue a line of business due to an unforeseen event.

Question 83

A company has negotiated a credit facility with the following terms:

  • $5,000,000 line of credit
  • $3,000,000 average borrowing
  • 30 basis point commitment fee on the unused portion of the line
  • Interest rate on advances is 1-month LIBOR plus 4%
  • 1-month LIBOR is currently 2%

What is the annual interest rate on the line of credit?

Options:

A.

6.0%

B.

6.2%

C.

9.0%

D.

9.3%

Question 84

A company has negotiated a credit facility with the following terms:

  • $5,000,000 line of credit
  • $3,000,000 average borrowing
  • 30 basis point commitment fee on unused portion of line
  • Interest rate on advances is 1-month LIBOR plus 4%
  • 1-month LIBOR is currently 2%
  • Compensating balance requirement of 20% on the outstanding borrowings

What is the effective annual borrowing rate for the line of credit?

Options:

A.

6.0%

B.

6.2%

C.

7.8%

D.

9.3%

Page: 21 / 35
Total 932 questions
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