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CTP ExamESSENTIALS Study guide

According to the Association for Financial Professionals (AFP), the CTP exam aims at testing mastery of knowledge and skills required by treasury professionals for executing critical functions related to corporate liquidity, capital and risk management.

To register for the Certified Treasury Professional (CTP) exam, first you need to contact AFP (, Phone: 301.907.2862) to obtain an Authorization to Test (ATT). With this letter on hand you may contact the PearsonVUE Candidate Service Call Center at 866.TEST.CTP (866.837.8287) to schedule an exam appointment.

The CTP exam has 170 multiple-choice questions on cash and treasury management. You will be given 3.5 hours to complete the computer based exam. After the exam, you will be informed of the results immediately.

The exam domains are:


The CTP multiple choice exam has a coverage which is highly extensive - in fact so extensive that I wouldn't recommend taking the exam until you are fully drilled on the relevant topics. You know what, I personally think Higgin's Treasury Management book is excellent - it covers all the essential information that you need to know to tackle most exam topics, plus many more practical information for on the job use outside of the exam, all included in a mega size text book.

Many CTP candidates are experienced professional who have been in the field of treasury management for years, that they know most of the practical how-tos, and all they need is to learn the principles, concepts and science that are behind the practical techniques. Hundreds of pages worth of information is quite overwhelming for these busy professionals.

Quite many CTP candidates have mistakenly believed that the CTP MC based exam is going to give questions that are word for word copies from the Higgins's book. This is not true. The exam makes use of contents provided in Higgins's book for determining what is a correct answer and what is not. The exam does not copy and paste text from Higgins's book for forming exam questions.

To succeed in the exam you need to get yourself truly familiar with the most important information by going through sufficiently focused revision. This is where we fill the gap - you may think of our product as the unofficial supplement to Higgins's book, or you may view it as a standalone module with a focus on building up your exam readiness.

You may download the TOC of this study guide by clicking on the link below:


Study Guide TOC in PDF format


SAMPLE TEXT on Financial Theory, Definitions and Trends

Finance is the science of describing the management of money, banking, credit, investments, and assets. Finance theory is the field which deals primarily with investment making decisions and the concept of the time value of money.

An evolutionary trend is a general direction of evolutionary change. There is a gradual trend toward increased centralization and control of global treasury activities. Acquiring and enhancing treasury technology still remains a major focus. A revolutionary trend, on the other hand, is relatively more radical. Sarbanes Oxley brought such trend, but it became less of a burden in recent days.

A financial market is a mechanism or sort of a platform which allows people to easily trade financial securities, commodities, and other fungible items of value at reasonable transaction costs and at prices that can properly serve as an efficient-market.

Both general markets (with many commodities traded) and specialized markets (with only one commodity traded) exist. They all work the same - by placing many interested buyers and sellers in one "place", thus making it easy for them to locate each other. In fact, an economy which relies primarily on interactions between these buyers and sellers to allocate resources is known as a market economy.

Bond is a kind of debt security in which the authorized issuer owes the holders a debt and is obliged to pay interest and/or to repay the principal at a later date at maturity. A bond can therefore be thought of as a formal contract on repaying borrowed money with interest at fixed intervals. Having said that, a bond is no different from a loan - the issuer is the borrower (debtor), the holder is the lender (creditor), and the coupon is the interest. It is mostly used for financing long-term investments.

An Indenture is a legal contract between two parties. A Bond Indenture is a legal document issued to the lenders for describing key terms of the lending such as the interest rate, maturity date, convertibility, pledge, promises, representations, covenants, and other terms of the bond offering.

A treasury stock (aka reacquired stock) is a kind of stock which is bought back by the issuing company for the purpose of reducing the amount of outstanding stock on the open market. Stock repurchases are often used as a tax-efficient method of giving cash to the shareholders rather than paying dividends. A quite common motive for stock repurchase is to protect a company against hostile takeover. Do keep in mind, treasury stock does not pay dividend. It gives no voting rights. And it can never exceed the maximum proportion of total capitalization specified by law.

A warrant is a security that entitles the holder to purchase stock of a specific company that issued it at a specified price, which is usually higher than the stock price at time of issue. It is frequently attached to bonds or preferred stock as sort of a sweetener, effectively allowing the issuer to pay lower interest rates or dividends. It can, for example, enhance the yield of the bond and make the bond more attractive to potential buyers.

Equity warrants can be either call and put warrants. Call warrants give one the right to buy the underlying securities, while put warrants give one the right to sell the underlying securities. A warrant is said to be exercised when the holder informs the issuer their intention to purchase the shares underlying the warrant. A warrant's premium represents how much extra you have to pay for your shares when buying them through the warrant. The Expiration Date is the date the warrant will expire. Note that warrants are mostly traded over-the-counter.

SAMPLE TEXT on Liquidity Risk

Modern risk management would take an integrated approach to enterprise risk management for properly reflecting the fact that interest rate risk, credit risk, market risk, and liquidity risk are all interrelated. The Jarrow-Turnbull model is a remarkable example of a risk management methodology which integrates default and random interest rates.

In finance, liquidity risk refers to the risk that a given security or asset cannot be traded quickly enough in the market to prevent a loss. Liquidity risk may arise from situations in which a party interested in trading an asset fails to do it as nobody in the market wants to trade that asset. Liquidity risk becomes particularly important to parties who are about to hold or currently hold an asset. Manifestation of liquidity risk would be very different from a drop of price to zero. If one party cannot find another party interested in trading the asset, this is simply that the market participants cannot find each other. This is the reason why liquidity risk is commonly found higher in emerging markets or low-volume markets. Simply put, liquidity risk is a kind of financial risk due to uncertain liquidity.

Important: The Acid-test / quick ratio / liquid ratio is primarily for measuring the ability of a company to use its near cash or quick assets to immediately extinguish or retire its current liabilities. Quick assets include those current assets that can be quickly converted to cash at quite close to their book values.

Note that liquidity risk tends to compound other risks. When a trading organization has a position in an illiquid asset, its limited ability to liquidate that position at short notice will compound its market risk.


To order this book:

Examessentials CTP Study Guide 2013
Building your CTP Exam Readiness


ISBN-13: 978-1480018778
ISBN-10: 1480018775

Binding Type: US Trade Paper
Trim Size: 8" x 10"
Language: English
Color: Black and White

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