AFP AFP-CTP Online Practice Questions and Exam Preparation

AFP AFP-CTP Online Questions & Answers

• Question 441:

  Which of the following is a true statement about operating leverage?

  A. The higher the company's fixed costs are, the lower its operating leverage.
  B. The higher the company's fixed costs are, the higher its operating leverage.
  C. The lower the company's fixed costs are, the higher its operating leverage.
  D. The higher the company's variable costs are, the higher its operating leverage.
  B. The higher the company's fixed costs are, the higher its operating leverage.

• Question 442:

  A review of a company's risk management strategy would include all of the following EXCEPT:

  A. commodity price forecast.
  B. use of swaps.
  C. forfaiting.
  D. market volatility.
  C. forfaiting.

• Question 443:

  To increase the money supply, the Federal Reserve would increase which of the following?

  A. The reserve requirement
  B. The discount rate
  C. The purchase of open market securities D. The federal funds interest rate
  C. The purchase of open market securities D. The federal funds interest rate

• Question 444:

  Establishing the authority to open bank accounts is the responsibility of:

  A. the board of directors.
  B. the CFO.
  C. the treasurer.
  D. the board of governors.
  A. the board of directors.

• Question 445:

  An option can be exercised in the market at its:

  A. premium.
  B. put price.
  C. call price.
  D. strike price.
  D. strike price.

• Question 446:

  Which of the following are important uses of variance analysis in comparing actual cash flows with projected cash flows? I.Identifying unanticipated changes in inventory

  II. Enhancing short-term investment income

  III. Validating a capital budget

  IV.

  Identifying delays in accounts receivable collections

  A. I and II only
  B. I and IV only
  C. II and IV only
  D. I, II, III, and IV
  B. I and IV only

• Question 447:

  Improvements to the cash flow timeline from a selling company's perspective would include:

  A. decreasing disbursement float.
  B. decreasing collection float.
  C. increasing mail float.
  D. increasing invoice float.
  B. decreasing collection float.

• Question 448:

  All of the following are advantages of forward contracts EXCEPT they:

  A. can be created for almost any asset.
  B. can cover any period of time.
  C. are continually marked-to-market.
  D. can be for any amount.
  C. are continually marked-to-market.

• Question 449:

  Company XYZ is conservative when investing in their short-term portfolio. XYZ is looking to add the following money market instruments in their own country: a reverse re-purchase agreement, a floating-rate note, and a negotiable certificate of deposit. What types of investment risks are associated with these instruments?

  A. Credit and price risk
  B. Liquidity and price risk
  C. Default and liquidity risk
  D. Default, liquidity and price risk
  C. Default and liquidity risk

• Question 450:

  If a bank has a 10% reserve requirement, a 31-day month, and an earnings credit rate of 6.5%, which of the following is the approximate level of collected balances required to support $1.00 worth of bank service charges?

  A. $181
  B. $199
  C. $201
  D. $206
  C. $201