AFP AFP-CTP Online Practice Questions and Exam Preparation

AFP AFP-CTP Online Questions & Answers

• Question 811:

  A cash manager has determined that the break-even amount for justifying a wire transfer over an ACH for concentration of funds is $145,000. Using a wire instead of an ACH gives the company use of the funds two days earlier to make overnight investments. Based on a wire transfer cost of $10.00 and an ACH transaction cost of $0.70, what is the company's overnight investment interest rate on a 365-day year basis?

  A. 0.95%
  B. 1.17%
  C. 2.34%
  D. 2.57%
  B. 1.17%

• Question 812:

  A company is considering issuing debt in a market environment in which there is a larger than normal spread between high- and low-risk investments. Among several factors, what are the concerns regarding investor behavior that the treasurer will MOST need to consider?

  A. Matching maturity
  B. Availability of collateral
  C. Capital structure
  D. Flight to quality
  D. Flight to quality

• Question 813:

  A company has decided to manage its short-term investment portfolio in-house. It is looking for enhanced capital gains as well as the ability to sell the instruments on the secondary market at a premium. The investment manager has forecasted the interest rates shown below:

  

  Which investment strategy should be employed by the company?

  A. Passive strategy
  B. Matching strategy
  C. Tax-based strategy
  D. Total-return strategy
  D. Total-return strategy

• Question 814:

  An analyst is performing a lease versus buy analysis on a corporate jet. In the evaluation, a cost is relevant if it is:

  A. tied to inflation.
  B. different in each scenario.
  C. considered a sunk cost.
  D. unlikely to be incurred.
  B. different in each scenario.

• Question 815:

  What document serves as the basic account or service authorization, empowering a representative of a business to enter into agreements for financial services?

  A. Account resolution
  B. Credit agreement
  C. Service agreement
  D. Signature card
  A. Account resolution

• Question 816:

  Company ABC has undergone substantial system enhancements in order to take advantage of B2B efficiencies. To encourage its trading partners, ABC has offered a 1.5% discount to those who allow ABC to debit their bank account electronically on the day the product is delivered. The greater number of trading partners who agree to this arrangement, the greater improvement Company ABC will see in its:

  A. days' inventory.
  B. cash flow to total debt.
  C. days' payables.
  D. cash turnover ratio.
  D. cash turnover ratio.

• Question 817:

  Which of the following credit terms would be MOST appropriate for a seasonal product that a manufacturer wants to sell to a retailer during the product's off-season?

  A. 2/10, net 30
  B. 2/10, prox 30
  C. 2/10, net 120
  D. 3/15, 2/30, net 45
  C. 2/10, net 120

• Question 818:

  Which of the following is an example of off-balance-sheet financing?

  A. Capital lease
  B. Zero-coupon bond
  C. Commercial paper
  D. Factoring receivables
  D. Factoring receivables

• Question 819:

  A company is interested in lowering its overall banking costs, managing netting, pooling, re- invoicing, and centralizing FX exposure at headquarters. Which of the following options will accomplish this?

  A. In-house banking
  B. Shared service center
  C. Company processing center
  D. Automated clearing house
  A. In-house banking

• Question 820:

  The time between the payor's mailing of a check and the payee's receipt of usable funds is known as:

  A. collection float.
  B. mail float.
  C. processing float.
  D. availability float.
  A. collection float.