AFP AFP-CTP Online Practice Questions and Exam Preparation

AFP AFP-CTP Online Questions & Answers

• Question 101:

  Banks often control information flow, records and assets, therefore it is critical that banks have:

  A. backup systems and disaster recovery procedures.
  B. controlled disbursement procedures.
  C. standard formats for electronic submission.
  D. timetables for service implementation.
  A. backup systems and disaster recovery procedures.

• Question 102:

  An instrument that gives the right to buy a stated number of shares of common stock at a specified price is known as:

  A. an equity warrant
  B. a put option
  C. a zero coupon bond
  D. a subordinated debenture
  A. an equity warrant

• Question 103:

  A multinational company owns a United Kingdom subsidiary that has total assets equal to ? million and intercompany loans due to the parent company equal to $1 million. It would like to undertake a balance sheet hedge of the U.K. subsidiary's GBP liability because it expects a depreciation of the pound. Given these circumstances, which of the following actions would be appropriate?

  A. Borrow GBP from a U.K. bank to repay the intercompany dollar debt.
  B. Borrow USD from a U.K. bank to repay the intercompany dollar debt.
  C. Take no action because exchange rates cannot be predicted.
  D. Exchange rates are fixed and thus no losses should occur.
  A. Borrow GBP from a U.K. bank to repay the intercompany dollar debt.

• Question 104:

  Company M operates a grocery distribution business on Main Street. As part of its business continuity plan, Company M intends to purchase insurance to cover the facility lease for its Main Street warehouse in the event it cannot operate for a period of time. What type of coverage should Company M purchase?

  A. Cost reimbursement insurance
  B. Business interruption insurance
  C. General liability insurance
  D. Fiduciary insurance
  B. Business interruption insurance

• Question 105:

  Merchant MNO's sales for the day total $20,000. Fifty percent are credit cards, split between Card Red and Card Blue respectively, at 65% and 35% of the card volume. The average ticket is $50. Fees paid are 2% for Card Red and 2.5% for Card Blue and a fee of $0.05 per transaction. What are the fees that MNO will pay to the issuing banks?

  A. $217.50
  B. $227.50
  C. $232.50
  D. $242.50
  B. $227.50

• Question 106:

  Whether through an active or passive decision by management, a risk management policy of control without financing results in:

  A. risk retention.
  B. risk transfer.
  C. risk avoidance.
  D. risk indemnification.
  A. risk retention.

• Question 107:

  Unrealized holding gains and losses arise when trading securities are:

  A. marked-to-market and are reported under current income.
  B. marked-to-market and are reported under retained earnings.
  C. offset by the gains and losses of the item being hedged.
  D. recorded on the anniversary date of the purchase.
  A. marked-to-market and are reported under current income.

• Question 108:

  Which of the following is sought from a typical cash management services Request for Proposals (RFP)?

  A. CAMELS score
  B. Asset investment strategy
  C. Pension funding status
  D. Implementation team
  D. Implementation team

• Question 109:

  All of the following are examples of treasury management system transactions for liquidity management EXCEPT:

  A. FX transactions.
  B. loan draw-downs.
  C. investment sales.
  D. loan paydowns.
  A. FX transactions.

• Question 110:

  Why would a company establish a short-term credit facility?

  A. Short-term interest rates are expected to rise.
  B. The company would like to improve bank relationships.
  C. Cash shortages are being forecasted due to seasonality.
  D. There is an anticipated failure of the company's main depository bank.
  C. Cash shortages are being forecasted due to seasonality.