AFP AFP-CTP Online Practice Questions and Exam Preparation

AFP AFP-CTP Online Questions & Answers

• Question 551:

  A manufacturing company selling engines and other mechanical equipment, with invoices averaging $15,000, would use which of the following systems?

  A. Over-the-counter collections in numerous locations; deposits to field banks
  B. A company processing center; deposits to nearby bank(s)
  C. A wholesale lockbox with multiple deposit points
  D. A retail lockbox with multiple deposit points
  C. A wholesale lockbox with multiple deposit points

• Question 552:

  An individual has just inherited several million dollars and has decided to purchase the stock of a telecommunications company to diversify his portfolio. Before purchasing shares, he would like to do some company-specific research to determine which company to select. Examples of the information the individual wishes to obtain are financial statements and disclosures, company organizational structure, code of conduct, pending litigation, and profiles of the board of directors. Who would be the BEST person to contact to obtain all this information?

  A. Corporate Treasurer
  B. General Counsel
  C. Enterprise Risk Manager
  D. Investor Relations Manager
  D. Investor Relations Manager

• Question 553:

  Which of the following institutions would be regulated by the Office of the Comptroller of the Currency (OCC)?

  A. Regency Bank Holding Company
  B. Regency Federal Credit Union
  C. Regency National Bank
  D. Regency Savings and Loan
  C. Regency National Bank

• Question 554:

  A U.S. company is selling product for US$10,000 to a Canadian company with payment in Canadian dollars. The exchange rate has been booked at C$1.45/US $1 for payment upondelivery in 15 days. The Canadian dollar is forecasted to

  weaken within this period.

  This is an example ofA.

  A. forward transaction at a premium.
  B. forward transaction at a discount.
  C. spot transaction at a premium.
  D. spot transaction at a discount.
  B. forward transaction at a discount.

• Question 555:

  A bank issues a letter of credit (L/C) and receives a request for payment under the L/C. The buyer notifies the issuing bank not to make payment because there is a dispute over the quality of the merchandise. However, the documents received fully comply with the terms of the L/C. Which of the following statements is true?

  A. The buyer may immediately return the merchandise and cancel the L/C.
  B. The bank may delay payment until reimbursed by the buyer.
  C. The bank may delay payment, provided the seller is notified of the dispute within three business days.
  D. The bank must make payment and is entitled to immediate reimbursement from the buyer.
  D. The bank must make payment and is entitled to immediate reimbursement from the buyer.

• Question 556:

  Compared to a letter of credit, a documentary collection is:

  A. less costly and offers less protection.
  B. less costly and offers more protection.
  C. more costly and offers less protection.
  D. more costly and offers more protection.
  A. less costly and offers less protection.

• Question 557:

  Capital budgeting is defined as the:

  A. determination of the optimal level of debt versus equity.
  B. process of evaluating alternative investment projects.
  C. provision of sufficient borrowing facilities to meet transaction requirements.
  D. addition of capital to the firm which results in a cash inflow.
  B. process of evaluating alternative investment projects.

• Question 558:

  Net working capital is defined as:

  A. cash minus accrued liabilities.
  B. current assets minus current liabilities.
  C. investments minus current liabilities.
  D. total assets minus total liabilities.
  B. current assets minus current liabilities.

• Question 559:

  From a buyer's perspective, which of the following types of float would be eliminated if checks were replaced by electronic payment methods?

  A. Collection
  B. Invoicing
  C. Disbursement
  D. Lockbox
  C. Disbursement

• Question 560:

  Economists are forecasting a rise in gas prices within the next 3 months. Charged with the task of establishing a risk mitigation approach for the company, the CRO has determined that the company has considerable exposure to fluctuations in gas prices. In coming to this conclusion, the CRO:

  A. assessed financial derivatives.
  B. made a qualitative assessment.
  C. examined basic operating procedures.
  D. made a quantitative assessment.
  D. made a quantitative assessment.