AFP AFP-CTP Online Practice Questions and Exam Preparation

AFP AFP-CTP Online Questions & Answers

• Question 631:

  An institutional investor has purchased an investment that provides a fixed rate of return with some potential for delays in payments. The return is 70% tax deductible for this particular investor. What type of investment was MOST LIKELY purchased?

  A. Common stock
  B. Sinking fund debenture
  C. Preferred stock
  D. Bonds with warrants
  C. Preferred stock

• Question 632:

  Advantages of writing checks locally on a centralized disbursing bank include all of the following EXCEPT which statement?

  A. It minimizes the number of banks.
  B. It provides opportunity for volume discounts on bank charges.
  C. It reduces idle balances.
  D. It decreases administrative costs.
  D. It decreases administrative costs.

• Question 633:

  A large multinational company recently implemented new processes to automate its treasury operations. If these changes were the direct result of comparing the company's practices with those of other companies, the activities could be considered an example of which of the following?

  I. Liquidating

  II. Re-engineering

  III. Benchmarking

  IV.

  Forecasting

  A. I and III only
  B. II and III only
  C. I, II, and III only
  D. I, II, and IV only
  I. Liquidating II. Re-engineering III. Benchmarking IV. Forecasting
  B. II and III only

• Question 634:

  On the basis of the data above,

  

  what is the forecast for Thursday's cash receipts, under the exponential smoothing method?

  A. $110
  B. $120
  C. $122
  D. $130
  B. $120

• Question 635:

  Trade terms are renegotiated under e-commerce in order to:

  A. balance the payment.
  B. neutralize the float.
  C. quantify the savings.
  D. improve the seller's availability.
  B. neutralize the float.

• Question 636:

  Which of the following is the appropriate strategy to use for an active portfolio manager who is faced with an upward sloping yield curve?

  A. Purchase a security and hold to maturity
  B. Purchase a security and sell before maturity
  C. Purchase a security maturing before the funds are needed
  D. Purchase a security maturing when the funds are needed
  B. Purchase a security and sell before maturity

• Question 637:

  Controlled disbursement notification times can be improved by which of the following?

  A. Increasing the use of multiple transit routing numbers
  B. Implementing a 2 P.M. presentment
  C. Implementing a high dollar group sort program
  D. Using Payor bank services
  D. Using Payor bank services

• Question 638:

  A buyer receives an invoice from a supplier that offers discount terms of 3/10, net 60. What is the effective cost of discount?

  A. 15.64%
  B. 16.13%
  C. 21.90%
  D. 22.58%
  D. 22.58%

• Question 639:

  A company has large, ongoing short-term financing requirements with a maximum horizon of 250 days. It has a good credit rating and would like to use the least expensive source of short-term debt to finance its needs. The Treasurer might recommend which of the following?

  A. Commercial paper with a backup line of credit
  B. Asset sales through factoring of receivables
  C. A committed line of credit with compensating balances
  D. A single payment note secured by marketable securities
  A. Commercial paper with a backup line of credit

• Question 640:

  A treasurer is monitoring the yield curve through a service provider (like Reuters) and notices that it is moving from downward sloping to upward sloping. Based on this information, the treasurer should consider:

  A. a commercial paper program.
  B. a short-term borrowing facility.
  C. interest rate collars.
  D. a variable rate long term facility.
  C. interest rate collars.