The following article was excerpted from the CTP Exam Preparation Blog. Visit the blog for more helpful tips on preparing for the CTP Exam.
The CTP Exam is a timed test with nearly 200 questions to be answered in three and a half hours. This means that the participant has a little over one minute to answer each question. Considering that there are calculations to be performed for some of the answers, this can be discouraging to the test taker. An important fact to keep in mind about the test questions is that there are three levels of questions; basic, intermediate, and advanced.
A basic question is often a definition or fill-in-the-blank question. If you have studied the material in the text, these are the simplest questions to answer and take very little time. An example could be “The legislation requiring the Federal Reserve to establish interest rate ceilings on demand deposits was the ____________.”
An intermediate question is one where the participant is asked to choose between multiple possible answers. This requires the participant to be familiar with the concept and the way to determine the possible solutions, then to choose the best response. There may be some simple math involved. An example could be “What are the projected total assets for a company at the end of the next year?”. Included would be either a table of figures or a description of several factors that could impact the calculation. There may be additional, extraneous data in either the table or description, so the practitioner must first recognize how to respond to the question (what formula is involved), then extract the necessary information from the detail presented, and determine the correct answer.
An advanced question is one where the participant is presented with multiple possible answers involving more than one concept and must think through the consequences of each of the answers, as applied to the situation, and choose the best answer. An example could be a description of a company issuing foreign bonds, along with various details about the transaction, with the question being “What type of risk is this bond subject to?”. The practitioner would need to know the different kinds of risks posed by foreign bonds and the likely methods for mitigating those risks. They would then have to review the information for any details provided indicating that mitigation. Any risk mentioned that did not have mitigation identified in the presentation would then be the answer.
The purpose in identifying the types of questions asked is to allow the participant to focus their efforts when taking the test. Answer the basic questions first, as they take the least amount of time, then work on the rest. This provides more time to be used in answering the higher level questions.
Fred Butterfield, CTP, is a treasury manager based in Denver.