AFP AFP-CTP Online Practice Questions and Exam Preparation

AFP AFP-CTP Online Questions & Answers

• Question 251:

  All of the following are discounted instruments EXCEPT:

  A. preferred stock.
  B. banker's acceptance.
  C. commercial paper.
  D. Treasury bills.
  A. preferred stock.

• Question 252:

  Which of the following is a PRIMARY responsibility of a company's risk management function?

  A. Insurance
  B. Auditing
  C. Leasing
  D. Liquidity monitoring
  A. Insurance

• Question 253:

  Which of the following would be true for a company with high operating leverage?

  A. Its cost of goods sold does not increase as revenues increase.
  B. It has high variable costs per unit sold.
  C. If revenues increase marginally, it can achieve a large percentage increase in profits.
  D. Its semi-variable costs do not have a fixed cost component.
  C. If revenues increase marginally, it can achieve a large percentage increase in profits.

• Question 254:

  Following the latest round of cost-cutting measures at ABC Corporation, the Treasury Department retained a headcount of 2 individuals. While the analyst was out sick, she gave her password to her Manager so that payments could be released via the bank's wire transfer system. The Manager sent 3 wires out with incorrect banking instructions. The problem was not identified until the angry suppliers called several weeks later demanding payment. The corporation has not yet recovered the $130,000 sent to erroneous accounts. In this instance, which control failed for ABC Corp.?

  A. Three-way matching
  B. Segregation of duties
  C. Reconciliation of the bank statement
  D. Security within the bank's wire system
  B. Segregation of duties

• Question 255:

  An investor purchases securities that mature beyond the date when cash is required. The investor intends to sell the investment to meet the cash flow need. This strategy works best when:

  A. the yield curve is inverted.
  B. interest rates are increasing substantially.
  C. short term rates are lower than long term rates.
  D. investment prices are falling.
  C. short term rates are lower than long term rates.

• Question 256:

  

  Which currency will sell at the greatest discount in the forward market against the U.S.dollar?

  A. Euro
  B. Mexican peso
  C. Japanese yen
  D. Canadian dollar
  A. Euro

• Question 257:

  Which of the following is a major objective of treasury management?

  A. Determine the corporation's primary financial institution.
  B. Maintain access to medium- and long-term financing alternatives.
  C. Determine the amount of float in the collection process.
  D. Maintain financial reporting compliance with GAAP.
  B. Maintain access to medium- and long-term financing alternatives.

• Question 258:

  Which of the following instruments is sold at multiple price bid auctions?

  A. Commercial paper
  B. Certificates of deposit
  C. Treasury Bill
  D. Money market fund
  C. Treasury Bill

• Question 259:

  Recently LEW Utilities, a local utility company, began using the company processing center method to process customer payments. Prior to this change, it used its local depository bank's lockbox to process the payments. The PRIMARY advantage of the new method is to:

  A. decrease mail float as a result of applying payments in-house.
  B. ensure that payments are correctly applied to the customer's account.
  C. reduce the processing float since payments are mailed directly to the customer.
  D. lower overall costs since in-house processing is cheaper than third-party processing.
  B. ensure that payments are correctly applied to the customer's account.

• Question 260:

  In evaluating alternative capital investments, a company should consider qualitative factors such as:

  A. projected cash flows.
  B. estimated economic returns.
  C. corporate strategy.
  D. estimated costs.
  C. corporate strategy.