AFP AFP-CTP Online Practice Questions and Exam Preparation

AFP AFP-CTP Online Questions & Answers

• Question 661:

  XYZ Company is considering selling treasury stock but is concerned about the amount of capital it will raise given the current high volatility of the stock market. What is the BEST strategy a firm can employ to reduce its uncertainty?

  A. Hire an investment banker to underwrite the stock on a full underwriting basis.
  B. Hire an investment banker to issue the stock using a master registration statement.
  C. Hire an investment banker to underwrite the stock with no flotation costs.
  D. Hire an investment banker to underwrite the stock on a best efforts basis.
  A. Hire an investment banker to underwrite the stock on a full underwriting basis.

• Question 662:

  A company is looking for a way to finance their inventory. What is the BEST funding match?

  A. Long-term private placement
  B. Short-term debt
  C. Equity issuance
  D. Stock split
  B. Short-term debt

• Question 663:

  The principal roles of corporate finance include which one of the following combination of functions?

  A. Maintaining liquidity and optimizing cash
  B. Capital budgeting and financial risk management
  C. Establishing credit terms and collection policies
  D. Shareholder relations and dividend decisions
  B. Capital budgeting and financial risk management

• Question 664:

  An assistant treasurer discovers that the CFO has been allowing other executives to exercise stock options during blackout periods. What will prevent the assistant treasurer from losing his/her job if he/she reports this discovery?

  A. Investor Relations Policy
  B. Code of ethics
  C. Sarbanes-Oxley Act
  D. Whistle-blower law
  D. Whistle-blower law

• Question 665:

  A treasury employee of Company XYZ is privy to financial reporting information yet to be released to the public. He knows that year-end earnings exceed last year's and would be viewed as positive to the investment community. He casually mentions to a relative that now would be a good time to buy the stock of Company XYZ. Which section of the treasury code of ethics would typically be violated by such a disclosure?

  A. Employee conduct
  B. External activities
  C. Conflict of interest
  D. Confidential information
  D. Confidential information

• Question 666:

  Which of the following concentration transfer alternatives provide the fastest availability of funds?

  A. Point-of-sale terminal transfers
  B. Electronic depository transfers
  C. Wire transfers
  D. Value-added banks
  C. Wire transfers

• Question 667:

  In capital budgeting, a company might risk adjust which of the following?

  A. Times interest earned
  B. Internal rate of return
  C. Weighted average cost of capital
  D. After-tax cost of debt
  C. Weighted average cost of capital

• Question 668:

  Which method of financing would a company use to establish a wholly owned subsidiary to perform credit operations and obtain accounts receivable financing for the sale of products?

  A. Third party financing
  B. Captive finance company
  C. Factoring department
  D. Securitization
  B. Captive finance company

• Question 669:

  A distribution business has used several bank loans to finance its expansion plans. After a fire destroyed the company's facility and inventory, it went out of business due to the loss of revenue during the month it was closed. What type of insurance coverage should the company have had to prevent its demise?

  A. Cost reimbursement
  B. Property
  C. General liability
  D. Business interruption
  D. Business interruption

• Question 670:

  Under which of the following circumstances is lengthening the disbursement mail float NOT a benefit to the disbursing company?

  A. Interest rates are high.
  B. Vendors view a substantial delay as a late payment.
  C. Clearing float is reduced only slightly.
  D. The lengthened mail float exceeds standard clearing times.
  B. Vendors view a substantial delay as a late payment.