AFP AFP-CTP Online Practice Questions and Exam Preparation

AFP AFP-CTP Online Questions & Answers

• Question 701:

  Insurance companies often use which of the following payment instruments?

  A. Depository transfer check
  B. Time draft
  C. Preauthorized draft/check
  D. Payable through draft
  D. Payable through draft

• Question 702:

  Which of the following cash concentration transfers is MOST LIKELY to result in a bank ledger overdraft?

  A. A wire transfer of prior day's balances
  B. A DTC of current day's lockbox deposits
  C. An ACH transfer of anticipated deposits
  D. An ACH transfer of one-day available funds
  C. An ACH transfer of anticipated deposits

• Question 703:

  A company is filing for bankruptcy protection and is concerned about the welfare of its sizeable retiree population. Under ERISA, it is obligated to perform which of the following actions regarding its defined benefit plan?

  A. Use proceeds from asset sales to fund the plan liability.
  B. Convert the plan to a portable, hybrid vehicle.
  C. Record a distress termination with the PBGC.
  D. File a 5500 report (bankruptcy amendment) with the DOL.
  C. Record a distress termination with the PBGC.

• Question 704:

  Which of the following are treasury management objectives?

  I. To meet obligations in a timely manner

  II. To minimize holdings in non-earning cash balances

  III. To monitor and assist in the control of financial risk

  IV.

  To evaluate costs and benefits of capital projects

  A. I and III only
  B. II and IV only
  C. I, II, and III only
  D. I, III, and IV only
  I. To meet obligations in a timely manner II. To minimize holdings in non-earning cash balances III. To monitor and assist in the control of financial risk IV. To evaluate costs and benefits of capital projects
  C. I, II, and III only

• Question 705:

  A company has negotiated a credit facility with the following terms:

  $5,000,000 line of credit $3,000,000 average borrowing 30 basis point commitment fee on the unused portion of the line Interest rate on advances is 1-month LIBOR plus 4% 1-month LIBOR is currently 2%

  What is the annual interest rate on the line of credit?

  A. 6.0%
  B. 6.2%
  C. 9.0%
  D. 9.3%
  B. 6.2%

• Question 706:

  All of the following are differences between Fedwire and ACH EXCEPT:

  A. ACH per item transaction costs are less.
  B. ACH transactions have delayed settlement.
  C. ACH transactions involve more consumer payments.
  D. ACH items have no credit risk.
  D. ACH items have no credit risk.

• Question 707:

  An arrangement in which a borrower makes periodic payments to a separate custodial account that is used to repay debt is known as a:

  A. sinking fund
  B. balloon payment
  C. mortgage
  D. zero-coupon bond
  A. sinking fund

• Question 708:

  ABC Company offers trade terms of 2/10 NET 30. For several reasons, ABC has decided to eliminate the requirement for a letter of credit from one of its customers. If ABC puts the customer on open book credit, what is the MOST LIKELY outcome?

  A. ABC's credit rating will suffer.
  B. The customer's working capital has deteriorated.
  C. ABC's working capital is unchanged.
  D. The customer's cost of borrowing will increase.
  C. ABC's working capital is unchanged.

• Question 709:

  Future treasury operations will be affected MOST significantly by consolidation of which of the following?

  A. Competitors
  B. Subsidiaries
  C. Commercial banking industry
  D. Procurement cards
  C. Commercial banking industry

• Question 710:

  A company that has a nationwide workforce may use which of the following methods for disbursing payroll to minimize the number of bank accounts?

  I. Payable through draft

  II. Multiple drawee checks

  III.

  ACH credit transfers

  A. I only
  B. II only
  C. I and III only
  D. II and III only
  I. Payable through draft II. Multiple drawee checks III. ACH credit transfers
  D. II and III only