AFP AFP-CTP Online Practice Questions and Exam Preparation

AFP AFP-CTP Online Questions & Answers

• Question 181:

  ABC Company is a net borrower with a weighted average cost of capital of 11.5%. What kind of bank fee arrangement is it likely to prefer?

  A. Fee compensation
  B. Balance compensation
  C. Average balance compensation
  D. Average fee compensation
  A. Fee compensation

• Question 182:

  A United States company must remit a dollar royalty payment to its Japanese subsidiary. Cash settlement of the payment would typically be made by which of the following?

  A. SWIFT
  B. ACH
  C. CHIPS
  D. Giro system
  C. CHIPS

• Question 183:

  The Federal Reserve can increase the money supply by:

  A. increasing the reserve requirement.
  B. increasing the discount rate.
  C. selling government securities.
  D. purchasing government securities.
  D. purchasing government securities.

• Question 184:

  Included in the CAMELS rating system for financial institutions are all of the following EXCEPT:

  A. credit rating.
  B. earnings.
  C. asset quality.
  D. liquidity.
  A. credit rating.

• Question 185:

  XYZ Company is a U.S. based company that has just issued some euro-denominated bonds in London. The bonds have a duration of 10 years at a rate of 3.5% with a par value of EUR 50 million. An FX swap contract was created on the date of the issuance in EUR/USD, with a spot rate of 1.2908 and a forward rate of 1.1102. This bond is subject to what type of risk?

  A. Interest rate
  B. Currency
  C. Floating rate
  D. Duration
  A. Interest rate

• Question 186:

  A company has grown quickly in the euro zone market. It wants to maximize its excess cash. Which would be the BEST method of concentrating funds?

  A. Bank Overlay
  B. Notional Pooling
  C. Physical Pooling
  D. Scheduled Transfer
  C. Physical Pooling

• Question 187:

  Which of the following is an intangible asset?

  A. Prepaid supplies expense
  B. Patent on manufacturing equipment
  C. Paid-in-capital
  D. Cash value of life insurance
  B. Patent on manufacturing equipment

• Question 188:

  Company A has decided to purchase $3,000,000 of real estate from Company B. Company A will make the payment in 3 parts. The electronic payments will be sent from Bank A to Bank B. On Day 1 Company A will send a $400,000 check as a deposit, which is deductible from the balance. The check is expected to clear in 4 days. On Day 2, two payments are initiated, one wire transfer for $2,000,000 and an ACH for $600,000 to complete the balance. On Day 2 what percentage of the payment to Company B is NOT final?

  A. 33.3%
  B. 66.7%
  C. 86.7%
  D. 100%
  A. 33.3%

• Question 189:

  In order to reduce the premiums paid to insurance companies, a company should consider retaining or self insuring for:

  A. small or low severity losses.
  B. high severity losses.
  C. only property losses but no liability losses.
  D. directors and officers liability losses.
  A. small or low severity losses.

• Question 190:

  A U.S.-based electronics company that buys components from one of its foreign subsidiaries at a price above market is likely to:

  A. be paid large dividends by the subsidiary.
  B. be sheltering profits in a low-tax country.
  C. need tax consultants to act as intermediaries.
  D. make payment with an intracompany loan.
  B. be sheltering profits in a low-tax country.