AFP AFP-CTP Online Practice Questions and Exam Preparation

AFP AFP-CTP Online Questions & Answers

• Question 921:

  A company has six fraudulent checks clear its primary disbursement account for a total of $7,652. The bank agrees to split the loss with the company to maintain a good relationship. As a condition of sharing the expense, the bank requires the company to establish positive pay on its disbursement accounts or have the company absorb the losses on future fraudulent payments.

  If the company determines that positive pay is too expensive and decides NOT to implement it, what type of risk financing technique is the company using?

  A. Crime insurance
  B. Self-insurance
  C. Risk avoidance
  D. Risk transfer
  B. Self-insurance

• Question 922:

  An analysis of variances from expected cash flows is used to: A. select investments.

  B. set hedging position.
  C. update forecasts.
  D. determine available balances.
  C. update forecasts.

• Question 923:

  Financial statement preparation guidelines are provided by:

  A. FOMC.
  B. FDIC.
  C. FASB.
  D. FATF.
  C. FASB.

• Question 924:

  For a retirement plan to be qualified under ERISA, employer and employee contributions must be:

  A. invested to maximize portfolio return.
  B. placed in a separate fund held by a third party.
  C. placed with a professional investment manager.
  D. invested to provide a defined benefit for plan participants.
  B. placed in a separate fund held by a third party.

• Question 925:

  The Treasurer for XYZ Manufacturing, Inc. recently exchanged a portion of its euro holdings into U.S. dollars to purchase gas futures contracts. This was done in anticipation of an assumed rise in gas prices due to the continued weakening of the U.S. dollar. Which of the following types of risk is being mitigated?

  A. Sovereign
  B. Operational
  C. Commodity price
  D. Foreign exchange
  C. Commodity price

• Question 926:

  Which of the following is NOT true for both bankers' acceptances and trade acceptances?

  A. They are both used to finance the shipment of goods.
  B. They both may be sold to an investor at a discount prior to maturity.
  C. They are both less expensive forms of financing than loans.
  D. They both transfer the buyer's credit risk to a third party.
  D. They both transfer the buyer's credit risk to a third party.

• Question 927:

  The discount rate for a T-bill with a face value of $200,000, 182 days to maturity, and a selling price of $194,375 would be:

  A. 2.80%.
  B. 5.56%.
  C. 5.63%.
  D. 49.18%.
  B. 5.56%.

• Question 928:

  Over the past 3 years XYZ Company has expanded into multiple countries and significantly grown its banking relationships. The company now incurs significant expenses related to payment transaction costs and maintaining multiple bank connections. What should the company use to combat these rising costs?

  A. SWIFT network
  B. ACH network
  C. CHIPS network
  D. Treasury workstation
  A. SWIFT network

• Question 929:

  Which of the following is a ratio that is often used by commercial banks to measure a company's leverage and does not include the effect of assets that are difficult to value or are NOT easily converted to cash?

  A. Long-term debt to capital
  B. Debt to tangible net worth
  C. Total liabilities to total assets
  D. Cash flow to total debt
  B. Debt to tangible net worth

• Question 930:

  JKL Company has been successful in shortening the time associated with its mail float, processing float and availability float. JKL Company will experience which of the following as a result of these improvements?

  A. Decrease in its opportunity cost
  B. Increase in its earnings rate
  C. Increase in its collection float
  D. Decrease in its NSF charges
  A. Decrease in its opportunity cost