AFP AFP-CTP Online Practice Questions and Exam Preparation

AFP AFP-CTP Online Questions & Answers

• Question 601:

  Multi-divisional or multi-subsidiary companies have opportunities to optimize their working capital position and overall liquidity by doing which of the following?

  A. Consolidating the cash resources of all divisions and subsidiaries in order to pay down corporate debt
  B. Allocating corporate debt to each division or subsidiary according to its cash needs
  C. Negotiating with suppliers to extend their payment terms for key divisions or subsidiaries
  D. Establishing strict credit standards that are uniform for all divisions or subsidiaries
  A. Consolidating the cash resources of all divisions and subsidiaries in order to pay down corporate debt

• Question 602:

  When a buyer receives goods, but payment is not due to the supplier until some later date, this is defined as:

  A. factoring.
  B. bank credit.
  C. trade credit.
  D. intercompany loan.
  C. trade credit.

• Question 603:

  Which of the following objectives of treasury management refers to a company's ability to meet current and future financial obligations in a timely, efficient, and cost-effective manner?

  A. Establishing access to short-term financing
  B. Maintaining liquidity
  C. Optimizing cash resources
  D. Managing risk
  B. Maintaining liquidity

• Question 604:

  When estimating the cost of capital, which of the following financial resources would probably NOT be included in the cost of capital calculation?

  A. Common stock
  B. Long-term debt
  C. Preferred stock
  D. Short-term debt
  D. Short-term debt

• Question 605:

  A residential mortgage company that wants to collect monthly payments from customers electronically via the ACH would initiate:

  A. PPD credits.
  B. PPD debits.
  C. CCD credits.
  D. CCD debits.
  B. PPD debits.

• Question 606:

  A company has a high value for its current ratio. What does this suggest in terms of liquidity and risk?

  A. Weak liquidity position and relatively high risk
  B. Strong liquidity position and relatively low risk
  C. Weak liquidity position and relatively low risk
  D. Strong liquidity position and relatively high risk
  B. Strong liquidity position and relatively low risk

• Question 607:

  Which of the following clears international checks?

  A. Correspondent banks
  B. Fedwire
  C. SWIFT
  D. Check truncation
  A. Correspondent banks

• Question 608:

  Due to a loss of proprietary information held for clients, ABC Company has been named in a billion dollar lawsuit. It was determined that the loss of information was due to a breach in its computer system firewalls by outside parties. When the lawsuit became public, the company experienced a steep drop in its stock price. This scenario is an example of what kind of risk?

  A. Internal technology
  B. Compliance
  C. External theft/fraud
  D. Market
  C. External theft/fraud

• Question 609:

  A banker's acceptance can be described as all of the following EXCEPT:

  A. a sight draft.
  B. a discount instrument.
  C. a liability of the accepting bank.
  D. an easily marketable instrument.
  A. a sight draft.

• Question 610:

  When establishing a retail collection system that accepts consumer debit cards, a company must comply with which Federal Reserve regulation?

  A. CC
  B. D
  C. E
  D. Q
  C. E