AFP AFP-CTP Online Practice Questions and Exam Preparation

AFP AFP-CTP Online Questions & Answers

• Question 211:

  A company determines that no combination of risk control or financing techniques will produce an adequate, risk-adjusted rate of return on manufacturing a new product. It decides to discontinue the product line. This is an example of:

  A. capacity error.
  B. indemnification.
  C. exposure avoidance.
  D. consequential damages.
  C. exposure avoidance.

• Question 212:

  A treasurer decides to use notional pooling across wholly-owned multiple legal entities instead of wiring money between entity accounts. What specific section in the company's policy allowed the treasurer to make this decision?

  A. Regulatory and legal considerations
  B. Liquidity strategy
  C. Collection strategy
  D. Concentration practices and strategies
  D. Concentration practices and strategies

• Question 213:

  Customers of an electronic trading firm are experiencing problems with the online trading platform. The company IT department discovered that although display of market data is in the proper place, there are no tags being used to populate specific information in the necessary fields. The company is MOST LIKELY experiencing a problem with:

  A. Electronic Data Interchange (EDI).
  B. Extensible Markup Language (XML).
  C. Hypertext Markup Language (HTML).
  D. Public Key Infrastructure (PKI).
  B. Extensible Markup Language (XML).

• Question 214:

  A company is based in the United States and has an operating subsidiary in Germany. With a stable U.S. dollar and a depreciating euro, the company's cash manager may elect to:

  A. pool excess funds in the United States to offset German deficits.
  B. implement a dollar-based multilateral netting system.
  C. start leading receivables from the German subsidiary.
  D. establish a multicurrency account in the United States.
  C. start leading receivables from the German subsidiary.

• Question 215:

  An employer wishing to reduce operating income volatility would MOST LIKELY offer what type of retirement option to its employees?

  A. Defined contribution plan
  B. Defined benefit plan
  C. Retirement bonus plan
  D. Cash balance plan
  A. Defined contribution plan

• Question 216:

  Kahuna Boards Co. has just experienced a very profitable year and wants to share the success with its shareholders. In order to pay dividends, a sequence of events must occur. Which of the following chronological sequence of events is correct?

  1.

  Stock is sold without the upcoming dividend attached.

  2.

  Dividend is paid.

  3.

  Board of directors announces the dividend.

  4.

  Holders of record are specified.

  A. 3, 4, 1, 2
  B. 3, 4, 2, 1
  C. 4, 3, 2, 1
  D. 4, 3, 1, 2
  A. 3, 4, 1, 2

• Question 217:

  Corporate governance for publicly traded U.S. companies includes:

  A. the roles and responsibilities of independent directors.
  B. full compliance with local and state regulations.
  C. the structure and organization of executive management.
  D. timely and complete submission of audited financial statements with the SEC.
  A. the roles and responsibilities of independent directors.

• Question 218:

  The PRIMARY difference between money market instruments and capital market instruments is that capital market instruments are securities that are:

  A. less than a one-year maturity.
  B. long-term in nature.
  C. generally more liquid.
  D. issued by lenders with credit ratings.
  B. long-term in nature.

• Question 219:

  Company X has asked its banking partner for a recommendation on which type of bank account would be best if it has excess funds that are not required for daily cash management. The company determined the excess cash flows by using

  the short-term cash forecasting distribution method. Company X will require a return on these funds.

  Which account is recommended?

  A. Zero Balance
  B. Time Deposit
  C. Demand Deposit
  D. Controlled Disbursement
  B. Time Deposit

• Question 220:

  Company X, a US based multi-national, is exploring the option of locating a subsidiary in another country where there has been some historical risk of expropriation of local assets of foreign corporations. Therefore, as part of the risk assessment process the company must specifically quantify the:

  A. political risk.
  B. physical security risk.
  C. financial institution risk.
  D. property risk.
  A. political risk.