AFP AFP-CTP Online Practice Questions and Exam Preparation

AFP AFP-CTP Online Questions & Answers

• Question 171:

  An analyst at XYZ United is in charge of setting up the bank accounts. Fraud is a major concern due to the analyst's past experience with previous employers. The analyst has estimated that the company will earn 3.7% on surplus cash. Surplus cash must be invested in short-term investment grade investments. The company's closest competitor earned 4.1% for its surpluscash in its latest fiscal year. What bank service should the analyst use to maximize the company's surplus cash?

  A. Payable Through Draft
  B. Reverse Positive Pay
  C. Zero Balance Account
  D. Controlled Disbursement
  D. Controlled Disbursement

• Question 172:

  Which of the following companies would be MOST LIKELY to use a wholesale lockbox?

  A. A chemical company
  B. A credit card company
  C. A cable television company
  D. A mortgage company
  A. A chemical company

• Question 173:

  Which of the following ACH formats is commonly used for consumer payments such as deposits of payroll?

  A. CCD
  B. CTX
  C. PPD
  D. TXP
  C. PPD

• Question 174:

  A multinational corporation (MNC) moving all of its Mexican peso-denominated revenues into a lower tax-rate jurisdiction could adopt any of the following treasury practices EXCEPT:

  A. a shared service center.
  B. an in-house bank.
  C. licensing fees to subsidiaries.
  D. a notional pooling program.
  D. a notional pooling program.

• Question 175:

  The purpose of cash letters is to:

  A. arrange currency deliveries from the Fed.
  B. request payment under standby letters of credit.
  C. collect merchant charge-card sales.
  D. facilitate the clearing of paper checks.
  D. facilitate the clearing of paper checks.

• Question 176:

  When projecting the closing cash position, a cash manager must estimate which of the following?

  A. ACH credits
  B. Lockbox receipts
  C. Checks in the process of collection
  D. Clearings on non-controlled disbursement accounts
  D. Clearings on non-controlled disbursement accounts

• Question 177:

  ABC Company, a publicly held U.S. multinational, owns several manufacturing plants in Latin America as well as several ships to transport its products globally. 60% of its sales are from its euro-based subsidiaries. The company uses various derivative instruments to mitigate exposure to fluctuations in fuel prices and FX rates. The hedging deals are long- term and placed withmany counterparties. ABC Company is also a net borrower and has a syndicated credit facility in place. Which of the following actions to mitigate counterparty risk would MOST benefit the company?

  A. Eliminate specific AAA rated counterparties.
  B. Adopt a third-party custodian for investments.
  C. Implement or adjust single counterparty balance limits.
  D. Add to the number of counterparties to increase diversification.
  C. Implement or adjust single counterparty balance limits.

• Question 178:

  The Governmental Accounting Standards Board (GASB) is the authoritative standard- setting body for which of the following?

  A. Private universities
  B. Healthcare organizations
  C. Public works agencies
  D. Publicly traded companies
  C. Public works agencies

• Question 179:

  RAL Industries is a manufacturing company that currently has locations in the United States and Latin America and has just completed an acquisition of a company located in Europe. As a result of the acquisition, they have a large number of financial service providers. In an effort to reduce the number of providers and services used globally, RAL has decided to develop a formal selection process to consolidate its many global banking services. In order to reduce the amount of time the selection process takes, determine which services providers can offer, and the number of providers involved in the process, what should RAL Industries issue?

  A. Request for Quote
  B. Request for Proposal
  C. Request for Information
  D. Request for Participation
  C. Request for Information

• Question 180:

  A company hires an investment firm to fully underwrite a new stock issuance. Which of the parties carries the MOST risk?

  A. The public
  B. The company
  C. The company's bond holders
  D. The investment firm
  D. The investment firm