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 (http://www.afponline.org/, 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 ROLE OF TREASURY MANAGEMENT
TREASURY ORGANIZATIONAL STRUCTURE
FINANCIAL PLANNING AND ANALYSIS
WORKING CAPITAL MANAGEMENT
WORKING CAPITAL TOOLS
SHORT-TERM INVESTING AND FINANCING DECISIONS
TREASURY MANAGEMENT SYSTEMS
SOURCES OF CAPITAL
CAPITAL STRUCTURE AND DIVIDEND POLICY
GLOBAL TREASURY ENVIRONMENT
FINANCIAL RISK MANAGEMENT
OPERATIONAL AND INSURANCE RISK MANAGEMENT
CORPORATE GOVERNANCE AND ETHICS
RETIREMENT FUND MANAGEMENT
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
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.
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
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
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
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
Binding Type: US Trade Paper
Trim Size: 8" x 10"
Color: Black and White
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