AFP AFP Certification CTP Questions & Answers

• Question 21:

  Treasury policies and procedures should include responsibilities for:

  A. determining when dividends should be paid.

  B. evaluating alternative capital projects.

  C. approving department salary increases.

  D. key personnel in the treasury organization.

  Correct Answer: D

• Question 22:

  A Treasury Management System (TMS) is used to:

  A. obtain account balances.

  B. translate EDI documents.

  C. review bank availability schedules.

  D. open new bank accounts.

  Correct Answer: A

• Question 23:

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

  A. Net income

  B. Cash

  C. Payment methods

  D. Equity

  Correct Answer: B

• Question 24:

  Which of the following is a major objective of treasury management?

  A. Determine the corporation's primary financial institution.

  B. Maintain access to medium- and long-term financing alternatives.

  C. Determine the amount of float in the collection process.

  D. Maintain financial reporting compliance with GAAP.

  Correct Answer: B

• Question 25:

  An international organization has decided to move its treasury operations to the head office in Paris, France. The company's goal is to establish the treasury as the primary provider of banking services and all company financing. What would the new proposal be an example of?

  A. A hybrid treasury structure

  B. A decentralized and a re-engineered organization

  C. An in-house bank and a centralized organization

  D. An outsourced shared service center

  Correct Answer: C

• Question 26:

  A company recently implemented a treasury code of conduct, which defined appropriate actions and business behaviors. The company developed policies and procedures that assigned duties to managers, and distributed the code to all treasury employees. The treasury group could have improved upon this implementation by doing which one of the following?

  A. Having the code of conduct reviewed by the marketing department

  B. Providing training on the code to all employees

  C. Having the code certified under Sarbanes-Oxley Act requirements

  D. Incorporating the code under its disaster recovery plan

  Correct Answer: B

• Question 27:

  XYZ Company's cash manager is evaluating cash concentration transfer options. The company has an 8% cost of funds and $50,000 in average daily field cash receipts. The wire transferresults in the transfer of funds one day faster. Which of the following options correctly ranks the transfer choices from most cost-effective to least cost-effective?

  1.Electronic depository transfer costing $1.00 2.Electronic depository transfer costing $2.50 3.Wire transfer costing $8.00 4.Wire transfer costing $15.00

  A. 1, 2, 3, 4

  B. 1, 3, 2, 4

  C. 3, 1, 2, 4

  D. 3, 4, 1, 2

  Correct Answer: C

• Question 28:

  An organization must maintain adequate liquidity to meet:

  A. strategic objectives.

  B. five year plan.

  C. transaction requirements.

  D. defined contribution plan distributions.

  Correct Answer: C

• Question 29:

  A U.S. exporter has agreed to export goods to a Canadian buyer with net 30 payment terms due in Canadian dollars. What type of risk is the exporter exposed to?

  A. Economic exposure

  B. Commodity exposure

  C. Transaction exposure

  D. Translation exposure

  Correct Answer: C

• Question 30:

  Which of the following situations is the best example of transaction exposure?

  A. A U.S. headquartered firm consolidates their foreign subsidiary's financial statements into their home currency.

  B. A company that purchases raw materials locally and sells its products in local markets recently encountered foreign competition.

  C. A U.S. exporter sells merchandise to a French buyer and records a balance receivable with payment terms in euros due in three months.

  D. A multinational corporation uses balance sheet hedging to reduce net exposure of the parent company.

  Correct Answer: C