AFP AFP-CTP Online Practice Questions and Exam Preparation

AFP AFP-CTP Online Questions & Answers

• Question 641:

  Which of the following contributes MOST to the marketability of a security?

  A. An investment-grade rating
  B. An irrevocable letter of credit guarantee
  C. A return at or above the yield curve
  D. A large, active secondary market
  D. A large, active secondary market

• Question 642:

  Company XYZ is a manufacturer of industrial equipment and has enjoyed a large percentage increase in profits from a small increase in revenues. Sales recently plummeted resulting in steep decline in profitability. Which of the following BEST describes the cost structure of the company?

  A. Low contribution margin
  B. High financial leverage
  C. Low variable costs
  D. High operating leverage
  D. High operating leverage

• Question 643:

  A company has made all required payments on its revolving credit facility but its debt to tangible net worth ratio violates the facility's covenant. What has occurred?

  A. Cross default
  B. Transaction default
  C. Technical default
  D. Payment default
  C. Technical default

• Question 644:

  A bank is evaluating the credit risk for a company seeking to optimize costs and originate a high volume of outgoing ACH payments. What is the BEST provision the bank should establish to control its credit exposure?

  A. An intraday credit limit for the company
  B. A limit on the number of items processed per day
  C. An overdraft facility for the company
  D. A standby letter of credit for the company
  A. An intraday credit limit for the company

• Question 645:

  Two critical factors in determining an operational risk management strategy for a company are:

  A. organizational culture and technology.
  B. industry standards and competition.
  C. technology and data security.
  D. physical security and the number of manual processes.
  A. organizational culture and technology.

• Question 646:

  Without regard to costs, which of the following concentration mechanisms maximizes investment income in a multi-bank environment?

  A. Wire transfer
  B. Zero balance account
  C. ACH
  D. DTC
  A. Wire transfer

• Question 647:

  Companies that seek out other companies that have successfully redesigned their operations are engaging in a process called:

  A. outsourcing.
  B. benchmarking.
  C. re-engineering.
  D. continuous improvement.
  B. benchmarking.

• Question 648:

  What must be measured and monitored to ensure that a company has adequate liquidity?

  A. Net receivables
  B. Stock price
  C. Short-term borrowing obligations
  D. Net working capital
  D. Net working capital

• Question 649:

  A small group of investors is purchasing a company using a large amount of debt. This group is intending to sell off pieces of the acquired company to other firms that it believes can take advantage of potential synergies. What is this type of a transaction more specifically known as?

  A. A merger
  B. An acquisition
  C. A leveraged buyout
  D. An asset purchase
  C. A leveraged buyout

• Question 650:

  The U.S. government agency that administers and enforces trade sanctions against targeted foreign countries is the:

  A. Foreign Corrupt Practices Office.
  B. Office of Foreign Assets Control.
  C. Department of Justice.
  D. Federal Trade Commission.
  B. Office of Foreign Assets Control.