AFP AFP-CTP Online Practice Questions and Exam Preparation

AFP AFP-CTP Online Questions & Answers

• Question 261:

  BEA Company has determined its breakeven dollar amount for concentrating remote funds is $550.00. BEA Company has a daily earnings rate of 6% and gains one day of accelerated funds. If a wire costs BEA $35.00 dollars, what is the cost of an electronic funds transfer for BEA Company?

  A. $1.00
  B. $2.00
  C. $3.00
  D. $4.00
  B. $2.00

• Question 262:

  A company agrees to pay ?0,000,000 for a shipment from Japan. At the time the purchase order is placed the exchange rate is ?68/US$. At the time of payment the exchange rate is ?63/US$. What is the net effect on the dollar cost of the shipment if the transaction has NOT been hedged?

  A. An increase of $5,000
  B. An increase of $1,825
  C. A decrease of $5,000
  D. A decrease of $1,825
  B. An increase of $1,825

• Question 263:

  Treasury policies and procedures should outline roles and responsibilities for which of the following activities?

  A. Monitoring compliance with trade payment terms
  B. Initiating and approving internal and external transfers
  C. Establishing and communicating a company's credit policies
  D. Determining how much earnings are to be paid out in dividends
  B. Initiating and approving internal and external transfers

• Question 264:

  Senior management at ABC Company plans to make a large capital expenditure to bolster its infrastructure exactly one year from now. Their primary concern is to preserve the current capital position until the expected cash outlay. The majority of the cash at ABC Company is held in treasury notes, but management would like to also invest some of the money into corporate bonds and money market funds. Which investment objective BEST suits the needs of ABC Company?

  A. Exposure Horizon
  B. Diversification
  C. Liquidity
  D. Safety
  D. Safety

• Question 265:

  A portfolio manager would like to purchase U.S. 50 million of 10-year notes 3 months from now, but has heard news that the Federal Reserve will start a purchasing program of longer term treasuries that will include 10-year notes. The purchase program would likely cause a lowering of market interest rates. The manager would also like to avoid having to use margin on a daily basis. To remove the price risk that may be associated with the Federal Reserve purchasing program, the portfolio manager would MOST LIKELY enter into an:

  A. interest rate swap.
  B. interest rate collar.
  C. interest rate futures contract.
  D. interest rate forward contract.
  D. interest rate forward contract.

• Question 266:

  The Public Company Accounting Oversight Board (PCAOB):

  A. establishes standards for state and local governments.
  B. sets and publishes International Financial Reporting Standards.
  C. sets guidelines used by auditors when performing audits of private companies.
  D. oversees the auditors of public companies and protects investors' interests.
  D. oversees the auditors of public companies and protects investors' interests.

• Question 267:

  In a partial reconciliation, a bank provides a company with which of the following?

  A. Listing of paid items
  B. Listing of issued items
  C. Listing of outstanding checks
  D. Electronic account analysis
  A. Listing of paid items

• Question 268:

  A company's basic investment objectives should include all of the following EXCEPT:

  A. ensuring liquidity.
  B. optimizing returns.
  C. maximizing exposure.
  D. minimizing risk.
  C. maximizing exposure.

• Question 269:

  A company's credit agreements or loan covenants may require:

  A. minimum ratings for insurance carriers.
  B. high deductible levels and risk retention in order to minimize premium payments.
  C. outsourcing of the claims approval and payment process to an insurance company.
  D. risk management staff to work directly with underwriters to reduce commission payments.
  A. minimum ratings for insurance carriers.

• Question 270:

  A publicly traded company is looking to fund its next project with the issuance of stock. The company's stock is primarily held by a small group of investors. The company is concerned that issuing stock may upset these investors because it would dilute their holdings. Which of the following strategies would help address the investors' concern?

  A. Grant the investors cumulative voting rights.
  B. Grant the investors pre-emptive rights to the new issue.
  C. Allow the investors to cast their votes by proxy at the next shareowners meeting.
  D. Offer to stagger the election of directors.
  B. Grant the investors pre-emptive rights to the new issue.