AFP AFP-CTP Online Practice Questions and Exam Preparation

AFP AFP-CTP Online Questions & Answers

• Question 291:

  ABC Company's Treasury department outsourced its overnight investment duties to XYZ Money Management. XYZ placed the funds received from ABC into corporate commercial paper, which has recently gone into default after numerous ratings downgrades. The investment policy of ABC Company states that all investments must be in investment grade commercial paper; however, the agreement gives XYZ the ability to make exceptions with the approval of the Treasurer of ABC Company. The Treasurer was never notified of the ratings downgrades. What role or responsibility, if any, was violated with regards to the investment policy?

  A. Exposure horizon monitoring
  B. Valuation of investment vehicles
  C. Policy approvals and exception management
  D. No violation occurred
  C. Policy approvals and exception management

• Question 292:

  All of the following are common consumer-to-corporate international payment mechanisms EXCEPT:

  A. giros.
  B. debit cards.
  C. CHIPS.
  D. smart cards.
  C. CHIPS.

• Question 293:

  A bank employee programs an internal payment system to transfer half a cent of each transaction to her personal bank account. What type of risk does this behavior illustrate?

  A. Surety risk
  B. Payment risk
  C. Fiduciary risk
  D. Technology risk
  D. Technology risk

• Question 294:

  A company has six fraudulent checks clear its primary disbursement account for a total of $7,652. The bank agrees to split the loss with the company to maintain a good relationship. As a condition of sharing the expense, the bank requires the company to establish positive pay on its disbursement accounts or have the company absorb the losses on future fraudulent payments.

  What type of risk financing technique is the bank using?

  A. Crime insurance
  B. Self-insurance
  C. Risk retention
  D. Risk transfer
  D. Risk transfer

• Question 295:

  Based on the above information, before making the major acquisition, several large institutional shareholders have asked management to consider all of the following EXCEPT:

  

  A. a stock split.
  B. a special dividend.
  C. a stock repurchase.
  D. a stock dividend.
  A. a stock split.

• Question 296:

  A major toy retailer operates 65 stores throughout the Midwest. Which of the following collection methods is MOST LIKELY to be used by this company?

  A. Field deposit
  B. Preauthorized debit
  C. Direct deposit
  D. Wholesale lockbox
  A. Field deposit

• Question 297:

  An increasing number of multinational companies have adopted formal multilateral netting systems for which of the following reasons?

  A. To facilitate management of foreign exchange exposure
  B. To improve check clearing times
  C. To standardize payment routes and banking channels D. To eliminate duplicate payments to vendors
  A. To facilitate management of foreign exchange exposure

• Question 298:

  Which of the following would be MOST suitable for a risk-averse electronics manufacturer that uses copper in many of its components?

  A. A put option on copper futures
  B. A short position in copper futures
  C. A floor option on copper futures
  D. A costless collar using options on copper futures
  D. A costless collar using options on copper futures

• Question 299:

  A United States corporation purchases finished products from a German subsidiary and sells raw materials to the subsidiary several times in one month. To minimize foreign exchange transaction costs, the U.S. corporation's cash manager would MOST LIKELY use:

  A. bilateral netting.
  B. multilateral netting.
  C. forward options.
  D. pooling.
  A. bilateral netting.

• Question 300:

  Exhibit:

  

  What is the price to earnings ratio for Company ABC?

  A. 3.88
  B. 7.50
  C. 8.33
  D. 10.00
  C. 8.33