AFP AFP-CTP Online Practice Questions and Exam Preparation

AFP AFP-CTP Online Questions & Answers

• Question 81:

  A shareholder right found in many corporate charters is the preemptive right which provides:

  A. the right to purchase shares of new stock and maintain pro-rata ownership interest.
  B. the right to choose directors through cumulative voting.
  C. the right to prevent the company from setting certain board agenda items.
  D. the right of shareholders to choose the corporation's auditor.
  A. the right to purchase shares of new stock and maintain pro-rata ownership interest.

• Question 82:

  Company XYZ had the following sales over the last 5 years:

  

  The company raised funds to invest in its operations. Considering the company's growth, it is interested in future options that will allow it to maintain its debt level and keep debt costs low. The company is not concerned about changes to the working capital structure. Which security did the company issue?

  A. Unsecured bond
  B. Bond with an equity kicker
  C. Zero-coupon bond
  D. Convertible security
  B. Bond with an equity kicker

• Question 83:

  The combination of difference in condition (DIC) insurance and umbrella insurance:

  A. transfers risk to a company's captive insurance subsidiary.
  B. replaces the coverage provided by basic property and liability insurance.
  C. supplements the coverage provided by basic property and liability insurance.
  D. provides payments to a company in the event it is unable to pursue a line of business due to an unforeseen event.
  C. supplements the coverage provided by basic property and liability insurance.

• Question 84:

  A lockbox provider offers which of the following advantages over a company processing center?

  I.It increases the company's operational control.

  II.It produces processing economies of scale.

  III.It allows for external audit controls.

  IV.It reduces collection float.

  A. I only
  B. II and III only
  C. I, II, and III only
  D. II, III, and IV only
  I. It increases the company's operational control. II.It produces processing economies of scale. III.It allows for external audit controls. IV.It reduces collection float.
  D. II, III, and IV only

• Question 85:

  The measurement of the significance of any loss exposure depends on:

  A. loss type and loss prevention.
  B. loss response and loss control.
  C. loss probability and loss history.
  D. loss frequency and loss type.
  D. loss frequency and loss type.

• Question 86:

  A sinking fund is primarily used for which of the following purposes?

  A. To ensure that adequate funds are available to redeem the bond issue
  B. To provide interest distributions to bondholders
  C. To provide periodic principal reductions over the life of the bond
  D. To pay bond administration costs
  A. To ensure that adequate funds are available to redeem the bond issue

• Question 87:

  The assistant treasurer of a company uses variance analysis comparing actual cash flows with projected cash flows and finds actual is less than forecasted. Which of the following would cause this variance?

  A. Pro forma income statement
  B. Weighted average cost of capital
  C. Capital budget forecast
  D. Delayed accounts receivable collection
  D. Delayed accounts receivable collection

• Question 88:

  If the spot foreign exchange rate and the forward foreign exchange rate are the same between two countries, which of the following is implied?

  A. The currency is at a discount to par.
  B. The currency is at a premium to par.
  C. There is an interest rate differential between the two countries equalizing the rates.
  D. The interest rate structure between the two countries is the same.
  D. The interest rate structure between the two countries is the same.

• Question 89:

  The PRIMARY goal of treasury management is to use which of the following efficiently?

  A. Net income
  B. Cash
  C. Payment methods
  D. Equity
  B. Cash

• Question 90:

  Which of the following statements are true about collected balances?

  I.They can be lower than ledger balances.

  II.They are influenced by the bank's availability schedule.

  III.They exclude negative account balances.

  IV.They may generate an earnings credit.

  A. II and III only
  B. I, II, and IV only
  C. I and IV only
  D. II, III, and IV only
  I. They can be lower than ledger balances. II.They are influenced by the bank's availability schedule. III.They exclude negative account balances. IV.They may generate an earnings credit.
  B. I, II, and IV only