AFP AFP-CTP Online Practice Questions and Exam Preparation

AFP AFP-CTP Online Questions & Answers

• Question 21:

  Which of the following prohibits price discrimination among customers where cost differences do NOT exist?

  A. Robinson Patman Act
  B. Truth in Lending Act
  C. Fair Credit Billing Act
  D. Equal Credit Opportunity Act
  A. Robinson Patman Act

• Question 22:

  The mix of long-term debt and equity refers to a company's:

  A. financial leverage.
  B. capital structure.
  C. current ratio.
  D. WACC.
  B. capital structure.

• Question 23:

  XYZ Company has one inventory supplier, and title to inventory is transferred to the company during the manufacturing process. Which of the following BEST describes XYZ's relationship with its supplier?

  A. Collateralized
  B. Outsourced
  C. Supplier-managed
  D. Paid-on-production
  D. Paid-on-production

• Question 24:

  A digital signature cannot be forged if:

  A. the private key is never shared with anyone.
  B. maintained by a certificate authority.
  C. it has undergone authentication.
  D. it is RSA-encrypted.
  A. the private key is never shared with anyone.

• Question 25:

  The relationship between debt and equity in a company's capital structure is called:

  A. leverage.
  B. securitization.
  C. market capitalization.
  D. liquidity.
  A. leverage.

• Question 26:

  A U.S. bank is actively trying to establish its operations in an emerging market country, but is not experiencing much success due to differences in the business culture. To gain some market share, an executive of the bank decides to give the son of a local dignitary a highly paid positionin the organization. Furthermore, the dignitary is a person of interest on various terror watch lists. Sanctions can be placed on the bank because the executive did NOT establish compliance with which of the following?

  A. Bank Secrecy Act
  B. Anti-Money Laundering
  C. Foreign Corrupt Practices Act
  D. Office of Foreign Assets Control
  C. Foreign Corrupt Practices Act

• Question 27:

  A company has a $300,000 credit line of which $200,000 was the average amount outstanding for the year. The terms of the loan include a 1/2 of 1% commitment fee on the unused portion, an interest rate of 10%, and a compensating balance requirement of 2% of the total credit line. The company's compensating balances are funded from credit-line borrowings.

  What is the effective annual interest rate on the net usable funds?

  A. 10.00%
  B. 10.25%
  C. 10.31%
  D. 10.57%
  D. 10.57%

• Question 28:

  Which of the following are primary objectives of cash forecasting?

  I. Managing liquidity

  II. Optimizing float

  III. Enhancing financial control

  IV.

  Minimizing borrowing costs

  A. I and II only
  B. II and III only
  C. I, III, and IV only
  D. I, II, III, and IV
  I. Managing liquidity II. Optimizing float III. Enhancing financial control IV. Minimizing borrowing costs
  C. I, III, and IV only

• Question 29:

  ABC Ltd. uses a third party lockbox provider to collect and clear its paper receivables. A customer disputes the price charged for a binding machine and issues a check to ABC Ltd. for 50% of the balance due, noting "paid in full" on the face of the check. The third party provider does not bring the check to ABC's attention prior to depositing it. Which regulation allows ABC to attempt to collect the remaining balance?

  A. UCC Article 2 - Clearing of Checks
  B. Federal Reserve Regulation CC
  C. UCC Article 3 - Negotiable Instruments
  D. UCC Article 4 - Bank Deposits and Collections
  C. UCC Article 3 - Negotiable Instruments

• Question 30:

  The historic rate of return in the U.S. stock market is 8%. An investment portfolio has a mix of equity investments consisting of 40% A-Corp stock, 30% K-Corp stock, 10% M-Corp stock and 20% W-Corp stock. The investment portfolio manager tends to buy and hold the equity investment position for 3 years on average. To calculate the required rate of return for this investment portfolio,

  

  what rate from the table would be used as the risk-free rate?

  A. 0.10%
  B. 0.75%
  C. 3.30%
  D. 4.50%
  A. 0.10%