AFP AFP-CTP Online Practice Questions and Exam Preparation

AFP AFP-CTP Online Questions & Answers

• Question 11:

  Which of the following industries is MOST LIKELY to use a sophisticated cash concentration system with multiple banks as part of its cash management system?

  A. Telecommunications
  B. Automotive
  C. Retail
  D. Payroll service
  C. Retail

• Question 12:

  A company's investment guidelines typically restrict all of the following EXCEPT:

  A. maturities of instruments that may be purchased.
  B. proportion of the portfolio invested in specific types of instruments.
  C. purchase of unrated securities.
  D. issuance of commercial paper.
  D. issuance of commercial paper.

• Question 13:

  An international company would establish a re-invoicing center for which of the following reasons?

  A. To reduce its international balance reporting charges
  B. To manage the foreign exchange exposure of its foreign subsidiaries
  C. To take advantage of interest-bearing demand deposits
  D. To bring transaction exposures more closely in line with economic exposures
  B. To manage the foreign exchange exposure of its foreign subsidiaries

• Question 14:

  A small regional bank is losing market share in fiduciary services and the CEO has decided to scale back the trust department. Which of the following is considered a core service of a trust department?

  A. Paying agent for dividend and interest payments
  B. Monitoring compliance with audit procedures
  C. Providing consulting services in debt origination
  D. Processing drafts for collection.
  A. Paying agent for dividend and interest payments

• Question 15:

  XYZ Company is a publicly held manufacturing company that has decided to branch out into the international market. Five million dollars is needed to set up management and hire the factory workers, $2 million for various government certifications in order to begin business in Poland, and $1 million for miscellaneous expenses. While looking for funding, XYZ found that local banks in Poland were not willing to provide financing without which of the following?

  A. A Full Guarantee
  B. A Comfort Letter
  C. A Personal Guarantee from the CEO
  D. A Certified Workers Compensation Policy
  A. A Full Guarantee

• Question 16:

  True statements about the open account method of trade payment include which of the following?

  I. A bank guarantees payment.

  II. It is the most common type of trade credit.

  III. A periodic credit review of each customer is required.

  IV.

  The customer makes equal monthly payments.

  A. II only
  B. I and IV only
  C. II and III only
  D. I, III, and IV only
  I. A bank guarantees payment. II. It is the most common type of trade credit. III. A periodic credit review of each customer is required. IV. The customer makes equal monthly payments.
  C. II and III only

• Question 17:

  The primary bank for a major multinational company would use an overlay structure for euro zone cash concentration under which of the following circumstances?

  A. The primary bank cannot provide full domestic banking services and thus must sweep surplus funds from local banks.
  B. The local banks can provide full pooling arrangements and not sweep surplus funds.
  C. It is cost effective for companies to provide their own in-house banking services.
  D. There is excessive competition among local banks for cash management business.
  A. The primary bank cannot provide full domestic banking services and thus must sweep surplus funds from local banks.

• Question 18:

  Which of the following is normally MORE significant for a corporation?

  A. Unintentional actions by employees
  B. Defalcation events by employees
  C. Firewall breaches by employees
  D. Sarbanes-Oxley violations by employees
  A. Unintentional actions by employees

• Question 19:

  A company expects the U.S. dollar to depreciate in value compared to the British pound. The company will have a British pound payment to make in five months. The company would MOST LIKELY buy:

  A. a U.S. dollar call.
  B. a U.S. dollar put.
  C. a British pound call.
  D. a British pound put.
  C. a British pound call.

• Question 20:

  When a company creates future receivables and/or payables that are denominated in a currency other than its home or functional currency it is faced with:

  A. economic exposure.
  B. transaction exposure.
  C. translation exposure.
  D. futures risk exposure.
  B. transaction exposure.