AFP AFP-CTP Online Practice Questions and Exam Preparation

AFP AFP-CTP Online Questions & Answers

• Question 411:

  If the Federal Reserve wanted to stimulate a sluggish economy, it could do so by:

  A. increasing reserve requirements.
  B. buying U.S. government securities in the open market.
  C. selling U.S. government securities in the open market.
  D. increasing margin requirements.
  B. buying U.S. government securities in the open market.

• Question 412:

  The Treasury Manager of a privately held company is looking to finance new equipment that has a useful life of 5 years. What type of financing would the Treasury Manager MOST LIKELY employ to finance the equipment?

  A. Equity shares
  B. Long-term bond
  C. High-yield bond
  D. Installment term loan
  D. Installment term loan

• Question 413:

  Which of the following factors is NOT used by a cash manager to estimate a target compensating balance?

  A. Per-item service costs
  B. Average volume
  C. Ledger balance
  D. Earnings credit rate
  C. Ledger balance

• Question 414:

  Which of the following is a disadvantage of e-commerce?

  A. Reduced collection float
  B. Reduced disbursement float
  C. Reduced accounts receivable cycle
  D. Reduced inventory cycle
  B. Reduced disbursement float

• Question 415:

  Company ABC is a restaurant chain that has enjoyed a surge in customers' dining with not much of a profitability increase in the last couple of years. Following a bad restaurant review, customer traffic deteriorated with not much change in profitability. Which of the following BEST describes the cost structure of the company?

  A. Low variable costs
  B. Economies of scale
  C. Low financial leverage
  D. Low operating leverage
  D. Low operating leverage

• Question 416:

  A company invests in a bond and then later agrees to sell the bond to a bank with the understanding that the company will buy the bond back at a later time. This is known as:

  A. reverse repurchase.
  B. securitization.
  C. factoring.
  D. syndication.
  A. reverse repurchase.

• Question 417:

  A national retailer's cash management system includes a field deposit system using multiple banks. To limit the impact of a failure of one of these banks, a cash manager should:

  A. consolidate all accounts at one bank.
  B. use wire transfers for concentration.
  C. monitor each bank's credit policies.
  D. concentrate cash on a regular basis.
  D. concentrate cash on a regular basis.

• Question 418:

  MICR encoding errors may be detected by all of the following TMS modules EXCEPT:

  A. positive pay module.
  B. current day reporting.
  C. reverse positive pay module.
  D. prior day reporting.
  B. current day reporting.

• Question 419:

  Each of the following statements is true of both defined benefit plans and defined contribution plans EXCEPT:

  A. both of the plans are typically structured as single-employer plans and maintained for employees.
  B. both can be classified as overfunded or underfunded depending on the value of plan assets.
  C. the treasurer is normally responsible for overseeing the performance of the plan fund managers.
  D. the Pension Protection Act of 2006 includes significant changes to the rules governing both types of plans.
  B. both can be classified as overfunded or underfunded depending on the value of plan assets.

• Question 420:

  A company has $75 million in adjustable-rate debt, $25 million in fixed-rate debt, and $50 million in accounts receivable. If the company is concerned that interest rates will rise, which of the following would be the BEST interest rate derivative?

  A. An interest rate floor
  B. An interest rate collar
  C. A forward rate agreement
  D. An interest rate cap
  D. An interest rate cap