AFP AFP-CTP Online Practice Questions and Exam Preparation

AFP AFP-CTP Online Questions & Answers

• Question 421:

  A company with a relatively poor credit rating borrows most of its funds with short maturities. They may want to change its exposure to interest rates to more correctly reflect the long-term nature of the projects it is funding. Or, they may believe that long-term interest rates are going to rise, causing it to seek protection against the impact of higher interest rates on its balance sheet. Which of the following would be a solution?

  A. Forward contract
  B. Interest rate swap
  C. Currency option
  D. Futures contract
  B. Interest rate swap

• Question 422:

  Which of the following statements is true about a forward foreign exchange contract?

  A. It is a right to buy or sell foreign currency at a specified price within a fixed time period.
  B. It does not require an underlying commercial transaction because the contract trades on its own.
  C. It specifies delivery of currencies at an exchange rate established today for a currency transaction that settles more than two days in the future.
  D. It is an exchange of currencies at the outset of a transaction at a fixed rate determined by the spot markets.
  C. It specifies delivery of currencies at an exchange rate established today for a currency transaction that settles more than two days in the future.

• Question 423:

  Today's modern cash management systems would include which of the following?

  A. Full integration to ERP systems
  B. Performance management systems and support
  C. Remote check disbursement software
  D. Full customer relationship management (CRM) capability
  A. Full integration to ERP systems

• Question 424:

  The Sarbanes-Oxley Act of 2002 requires that a public company's financial statements be certified by the company's:

  A. chief financial officer and corporate secretary.
  B. chief financial officer and corporate controller.
  C. chief financial officer and chief executive officer.
  D. chief financial officer and chief operating officer.
  C. chief financial officer and chief executive officer.

• Question 425:

  An auto manufacturer experienced a decline in sales, an increase in inventory, and an increase in labor costs over the past two months. With all else being equal, what is the MOST LIKELY impact to the company's balance sheet?

  A. An increase in short-term liabilities
  B. A decrease in short-term liabilities
  C. An increase in long-term liabilities
  D. A decrease in long-term liabilities
  A. An increase in short-term liabilities

• Question 426:

  A high-yield, non-investment-grade security is commonly referred to as which of the following?

  A. A junk bond
  B. A convertible bond
  C. An industrial revenue bond
  D. An equity warrant
  A. A junk bond

• Question 427:

  If a company uses accrual accounting, deferred taxes are reported on which financial statement?

  A. Statement of cash flows
  B. Balance sheet
  C. Income statement
  D. Statement of changes in retained earnings
  B. Balance sheet

• Question 428:

  Systemic risk can be caused by which of the following?

  A. Bankruptcy of an industrial company
  B. Bankruptcy of an individual
  C. Failure of a community bank
  D. Failure of a money center bank
  D. Failure of a money center bank

• Question 429:

  Which of the following functions is LEAST likely to be part of a cash manager's responsibilities?

  A. Funds movement
  B. Bank compensation
  C. Forecasting
  D. Long-term financing
  D. Long-term financing

• Question 430:

  ABC Company is a national retail company and uses XYZ Bank for its collections and payroll services. XYZ has recently experienced financial problems; what is the greatest risk to ABC Company?

  A. Damage to their working relationship
  B. Deterioration of service quality
  C. Increase in service fees
  D. Loss of assets
  D. Loss of assets