AFP AFP-CTP Online Practice Questions and Exam Preparation

AFP AFP-CTP Online Questions & Answers

• Question 221:

  An olive oil producer in Macedonia is arranging for shipment of its product to an international distributor. To support this activity, the company arranges for export financing because:

  A. the currency of the financing is different from the currency of the activity being financed.
  B. the time required to obtain approval is less than for commercial financing.
  C. no government involvement is required.
  D. the interest rate is lower than rates available from commercial sources.
  D. the interest rate is lower than rates available from commercial sources.

• Question 222:

  Which of the following can be exercised only on the expiration date?

  A. American options
  B. European options
  C. Commodity swaps
  D. Basis swaps
  B. European options

• Question 223:

  Company XYZ offers a retirement plan wherein the value of the plan's assets and liabilities is measured separately. The plan's funding and valuation can have a significant impact on the financial condition of the company. Company ABC offers a retirement plan wherein the amount owed to the participants at retirement is based solely on the account balance at the time of withdrawal with participants often bearing the responsibility for managing the investments in their account. Which of the following BEST describes the above two retirement plans and which act governs them?

  A. 403(b) and defined contribution plan; ERISA
  B. Defined benefit plan and defined contribution plan; ERISA
  C. Qualified and non-qualified plan; Pension Protection Act
  D. Defined benefit plan and defined contribution plan; Pension Protection Act
  B. Defined benefit plan and defined contribution plan; ERISA

• Question 224:

  Financial risk management requires monitoring changes in which of the following?

  I. Interest rates

  II. Foreign exchange rates

  III. Commodity prices

  IV.

  Cost of insurance

  A. II and IV only
  B. I, II, and III only
  C. I, III, and IV only
  D. I, II, III, and IV
  I. Interest rates II. Foreign exchange rates III. Commodity prices IV. Cost of insurance
  B. I, II, and III only

• Question 225:

  A company has asked its marketing, payroll and sales teams to collaborate in finding a solution that could augment its customer base, reduce payroll cost and increase sales. The solution has to be market ready. Which of the following will serve all 3 purposes?

  A. Ghost cards
  B. Smart cards
  C. PIN based cards
  D. Stored value card
  D. Stored value card

• Question 226:

  A merchant, wanting to accept credit cards as payment method, will negotiate its fees with which of the following participants?

  A. Issuing bank
  B. Acquiring bank
  C. Network operator
  D. Issuing processor
  B. Acquiring bank

• Question 227:

  Which of the following is an example of a qualitative factor used in making credit decisions?

  A. Character
  B. Capital
  C. Collateral
  D. Capacity
  A. Character

• Question 228:

  Which of the following BEST describes an advantage of a company going public?

  A. Increased management control
  B. Increased public disclosure
  C. Increased managerial flexibility
  D. Increased liquidity
  D. Increased liquidity

• Question 229:

  Company XYZ is aggressively expanding globally. It is evaluating four markets: Latin America, Europe, Asia and Middle East.

  Latin AmericA. Risk adjusted discount ratE. 15%, Payback period=7 years, IRR=15%

  EuropE. Risk adjusted discount ratE. 8%, NPV=$20M

  Middle East: Risk adjusted discount ratE. 11%, IRR=12%, NPV=$5M

  AsiA. WACC. 9%, Payback=2 yrs, IRR=8%

  Based on the information, which two markets will company XYZ MOST LIKELY pursue?

  A. Europe and Asia
  B. Asia and Latin America
  C. Europe and Middle East
  D. Middle East and Latin America
  C. Europe and Middle East

• Question 230:

  Which of the following investment instruments is a discount instrument?

  A. Banker's acceptance
  B. Yankee CD
  C. Treasury note
  D. Municipal bond
  A. Banker's acceptance