AFP AFP-CTP Online Practice Questions and Exam Preparation

AFP AFP-CTP Online Questions & Answers

• Question 781:

  Company X has a rating that is below investment grade. The treasurer would prefer to use commercial paper for its short-term financing needs and has a commitment from its bank to provide a standby letter of credit. What costs would be associated with this process?

  A. Rating agency charges, credit enhancement costs, and dealer fees
  B. Discount, broker fees, and commitment fees
  C. Dealer fees, compensating balances, and participation fees
  D. Commissions, rating agency charges, and broker fees
  A. Rating agency charges, credit enhancement costs, and dealer fees

• Question 782:

  An intern was hired by the Vice President of Accounts Payables to process the electronic payments that come through the bank. The intern is responsible for manually entering payee information into the system at each step of the process. The VP directed the intern to enter the information as fast as possible without mistakes to optimize the number of transactions that could be processed. Instead of manually entering information the VP should have utilized:

  A. large value transfer system.
  B. straight-through processing.
  C. continuous linked settlement.
  D. enterprise resource planning system.
  B. straight-through processing.

• Question 783:

  A measure of the incremental impact of a company's investments on market capitalization is known as:

  A. weighted average cost of capital.
  B. economic value added.
  C. return on equity.
  D. working capital turnover.
  B. economic value added.

• Question 784:

  Which of the following are KEY issues to be considered when establishing a shared service center (SSC)?

  I. Selecting the location

  II. Comparing an SSC structure to outsourcing of a process

  III. Choosing and implementing the technology for SSC

  IV.

  Choosing the collection bank

  A. I and III only
  B. II and IV only
  C. I, II, and III only
  D. II, III, and IV only
  I. Selecting the location II. Comparing an SSC structure to outsourcing of a process III. Choosing and implementing the technology for SSC IV. Choosing the collection bank
  C. I, II, and III only

• Question 785:

  A company that is issuing a new class of stock would use the services of a(n):

  A. retail brokerage.
  B. portfolio manager.
  C. industrial credit company.
  D. investment brokerage firm.
  D. investment brokerage firm.

• Question 786:

  An electronics firm realizes that due to adverse events projected over the next 18 months there is a 5% chance that its profits will decrease by $100,000. The company's beta is .08 and its cost of capital is 9%. What approach is the company MOST LIKELY using to determine its level of financial risk?

  A. Value at Risk
  B. Sensitivity analysis
  C. Scenario analysis
  D. Monte Carlo simulation
  A. Value at Risk

• Question 787:

  An airline has entered into an agreement with its partners to offset receivables and payables for a specified period of time and to transmit or receive the difference via funds transfer at the end of the period. This is an example of:

  A. a barter agreement.
  B. an inter-company loan.
  C. trade credit.
  D. a net settlement system.
  D. a net settlement system.

• Question 788:

  If a corporation pays 70% of its current earnings to its stockholders in the form of cash dividends, the remaining 30% kept by the company will cause a(n):

  A. decrease in earned surplus.
  B. decrease in stockholders' equity.
  C. increase in capital surplus.
  D. increase in retained earnings.
  D. increase in retained earnings.

• Question 789:

  Which of the following occurs when the U.S. dollar strengthens?

  A. Foreigners will purchase more U.S. goods.
  B. U.S. exports become more competitive.
  C. Foreign exports become less competitive.
  D. Foreign exports become more competitive.
  D. Foreign exports become more competitive.

• Question 790:

  An evaluated receipts settlement would be MOST commonly used in an environment where:

  A. the cash conversion cycle is typically long.
  B. inventory turns over rapidly.
  C. volumes involved are small.
  D. the supplier sends an invoice.
  B. inventory turns over rapidly.