AFP AFP-CTP Online Practice Questions and Exam Preparation

AFP AFP-CTP Online Questions & Answers

• Question 371:

  What step can a cash manager take to validate a cash flow forecast?

  A. Calculate variances between actual and predicted depreciation.
  B. Test the model using data that was not used to develop it.
  C. Compare estimated sales to actual income.
  D. Compare estimated tax payments to actual payments.
  B. Test the model using data that was not used to develop it.

• Question 372:

  A daily short-term forecast and variance analysis for LMN, Inc. is updated with relevant trends and actual data every Monday. Upon review, the Treasurer assessed that sales were higher than forecasted, inventory was up and yields being earned on excess cash were lower. The MOST important reason for this cash forecast process is:

  A. financial control.
  B. managing costs.
  C. capital budgeting.
  D. liquidity management.
  D. liquidity management.

• Question 373:

  A call option for a company has an exercise price of $50. The stock is currently trading at $60. At maturity, what should an investor who paid $3 for the option do?

  A. Exercise the option and gain $7.
  B. Exercise the option and gain $10.
  C. Not exercise the option and lose $3.
  D. Not exercise the option and lose $13.
  A. Exercise the option and gain $7.

• Question 374:

  Making payments through electronic payments networks can be a part of a treasury management system's functionality, but it is subject to numerous constraints. Which of the following is a true statement of those constraints?

  A. The process is easy for the payee but very intensive manually for the payor.
  B. Negotiation of trade terms is required, but float terms are excluded.
  C. Remittance detail, whether a lot or a little, can be easily included with all payment forms.
  D. Collecting payment-routing details, and populating these into the software, is a significant task.
  D. Collecting payment-routing details, and populating these into the software, is a significant task.

• Question 375:

  Underfunded pension obligations can be reduced by:

  A. an upward shift in the yield curve.
  B. higher benefit payments to retirees.
  C. immediate vesting in the defined contribution plan.
  D. higher premiums to the Pension Benefit Guaranty Corporation.
  A. an upward shift in the yield curve.

• Question 376:

  Which of the following is generally NOT a benefit of financial risk management?

  A. The likelihood of financial distress decreases
  B. Greater predictability of future cash flows
  C. The opportunity to take advantage of market inefficiencies
  D. Enhanced borrowing advantage in credit markets
  C. The opportunity to take advantage of market inefficiencies

• Question 377:

  US dollar-denominated instruments issued by foreign banks through their domestic branches are known as:

  A. banker's acceptances.
  B. Eurocommercial paper.
  C. Eurodollar CDs.
  D. Yankee CDs.
  C. Eurodollar CDs.

• Question 378:

  Cash management services commonly used outside the United States include which of the following?

  I. Interest-bearing deposit accounts

  II. Controlled disbursement systems

  III.

  Pooling of bank accounts

  A. I and II only
  B. I and III only
  C. II and III only
  D. I, II, and III
  I. Interest-bearing deposit accounts II. Controlled disbursement systems III. Pooling of bank accounts
  B. I and III only

• Question 379:

  Based on the above information,

  

  if the company uses the trade-off theory in considering its WACC, how will it finance its growth?

  A. By using long-term debt
  B. By issuing Class A stock C. By using retained earnings
  D. By issuing Class B stock
  A. By using long-term debt

• Question 380:

  A large retailer is preparing to accept credit cards and anticipates monthly credit card sales of $1,000,000. If the terms with the acquiring bank include bundled allocated fees of 6% and the retailer wishes to delay fee payment as long as possible, what should the retailer do?

  A. Accept gross settlement.
  B. Place a hold on consumer credit limits.
  C. Receive net settlement.
  D. Delay funds transfer to card-issuing banks.
  A. Accept gross settlement.