AFP AFP-CTP Online Practice Questions and Exam Preparation

AFP AFP-CTP Online Questions & Answers

• Question 851:

  For a defined benefit plan,

  A. plan assets equal plan liabilities.
  B. plan assets can be less than plan liabilities.
  C. plan assets are greater than plan equity.
  D. plan assets always equal plan equity.
  B. plan assets can be less than plan liabilities.

• Question 852:

  Which statement is typically true about cash dividends?

  A. They are an expense to the company.
  B. They are a distribution of profits.
  C. They are based on the value of the company's stock.
  D. They are declared by the chief financial officer.
  B. They are a distribution of profits.

• Question 853:

  XYZ Bank would like to conduct some foreign exchange transactions with JKL Bank. JKL isn't the most liquid and could have some credit risk. XYZ Bank should suggest which of the following in order to eliminate risk?

  A. Pre-authorized draft
  B. Straight-through processing
  C. Forward rate contract
  D. Continuous Linked Settlement
  D. Continuous Linked Settlement

• Question 854:

  Optimal dividend policy is one that does all of the following EXCEPT:

  A. maintain adequate retained earnings for future growth.
  B. maximize shareholder value.
  C. distribute corporate income to investors.
  D. balance tax shield benefits against agency costs.
  D. balance tax shield benefits against agency costs.

• Question 855:

  A merchant closes its day with a total of 100 credit card transactions of an average ticket value of $100. The interchange reimbursement fees are 2% and transaction fees are $0.05. If this merchant receives gross settlement, what would be the value of deposit to the account for that day?

  A. $9,795
  B. $9,800
  C. $9,995
  D. $10,000
  D. $10,000

• Question 856:

  CT Check Cashing routinely cashes payroll checks from JD Software. Someone presents a fraudulent check from JD Software to CT Check Cashing. The fraudulent item looks virtually identical to JD Software's regular payroll checks. CT Check Cashing pays the person cashing the check the amount for which it is issued. CT Check Cashing later discovers that the check was fraudulent and wants JD Software to reimburse them for the amount of the check. Which of the following statements is correct?

  A. Fraudulent endorsement has occurred and JD Software will not be held liable for this item.
  B. This item is payable through draft so JD Software will be liable to CT Check Cashing for the amount of the check.
  C. JD Software has a controlled disbursement account so CT Check Cashing will not have recourse against JD Software for this item.
  D. Positive pay is designed to reject the item, but JD Software may ultimately be held liable if CT Check Cashing is deemed to be a holder in due course.
  D. Positive pay is designed to reject the item, but JD Software may ultimately be held liable if CT Check Cashing is deemed to be a holder in due course.

• Question 857:

  The treasurer of a corporation is negotiating with one of his/her suppliers to allow the corporation to have 30 days to pay the supplier's invoices. The treasurer is arranging:

  A. short-term financing.
  B. revolving credit agreement.
  C. factoring of receivables.
  D. uncommitted line of credit.
  A. short-term financing.

• Question 858:

  T-bill discount rate = 5.85%

  T-bill face value = $100,000

  Initial term = 90 days

  If the U.S. Treasury was considering issuing a 91-day T-bill at the same time as this T-bill, what discount rate would cause both instruments to have the same purchase price?

  A. 5.71%
  B. 5.79%
  C. 5.87%
  D. 5.92%
  B. 5.79%

• Question 859:

  One of the KEY risks associated with a company's use of financial institutions is the possibility that:

  A. frequent account management turnover at an institution will disrupt the company's operations.
  B. an institution's operations will put the company in violation of the Gramm-Leach-Bliley Act.
  C. an institution will inadvertently share the company's confidential data with its competitors.
  D. the institution will fail, which will have a financial impact on the company.
  D. the institution will fail, which will have a financial impact on the company.

• Question 860:

  Which of the following is true of return on investment (ROI)?

  A. It includes a charge for the cost of capital in a project.
  B. It is commonly used to calculate after-tax profitability.
  C. It may cause management to accept a project with positive NPV.
  D. It is calculated as profit per dollar of invested capital.
  D. It is calculated as profit per dollar of invested capital.