Pass Your AFP Exam with CTP Exam Dumps (Updated 932 Questions)
CTP Exam Dumps - AFP Practice Test Questions
NEW QUESTION 235
Company ABC needs external capital to finance a new product line. Its operating leverage is high, and its revolving credit agreement contains a ratings trigger. What will Company ABC MOST LIKELY do to finance its new product line?
- A. Issue long-term notes.
- B. Use retained earnings.
- C. Issue convertible debentures.
- D. Issue common stock.
Answer: D
NEW QUESTION 236
Which of the following would be the most efficient method of reducing the number of cross-border payments between two units of a company?
- A. A multicurrency account
- B. A re-invoicing center
- C. A netting system
- D. A pooling system
Answer: C
NEW QUESTION 237
All of the following would encourage a company operating nationwide to develop multiple banking relationships EXCEPT:
- A. enhanced credit availability.
- B. availability of specialized services.
- C. geographic proximity.
- D. administrative cost savings.
Answer: D
NEW QUESTION 238
Check MICR line information includes which of the following?
I.Bank of deposit identification number II.Payee bank identification number III.Federal Reserve bank code IV.Payor's account number
- A. II, III, and IV only
- B. III and IV only
- C. I, II, III, and IV
- D. I only
Answer: B
NEW QUESTION 239
Banks often control information flow, records and assets, therefore it is critical that banks have:
- A. backup systems and disaster recovery procedures.
- B. standard formats for electronic submission.
- C. controlled disbursement procedures.
- D. timetables for service implementation.
Answer: A
NEW QUESTION 240
The treasury management department of a company hires a consulting firm to provide research on how other companies in the industry have structured their treasury operations. This is an example of which practice?
- A. Re-engineering
- B. Restructuring
- C. Benchmarking
- D. Outsourcing
Answer: C
NEW QUESTION 241
An option can be exercised in the market at its:
- A. put price.
- B. strike price.
- C. call price.
- D. premium.
Answer: B
NEW QUESTION 242
A bank's reserve requirement on demand deposits is 10%, and its earnings credit rate is 6%. If a company uses bank services amounting to $2,600 and has an excess of $550 in earnings credit, what is the average collected balance in the account based on a 30-day month?
- A. $461,889
- B. $585,810
- C. $709,731
- D. $123,921
Answer: C
NEW QUESTION 243
Which of the following services allows a single account to be used by a company with multiple units?
- A. High-order prefix
- B. Payor bank services
- C. Positive pay
- D. Check inquiry
Answer: A
NEW QUESTION 244
Which of the following types of risk would an investor who does NOT receive payments on a security under the original terms be subject to?
- A. Foreign exchange
- B. Asset liquidity
- C. Credit
- D. Price
Answer: C
NEW QUESTION 245
Cash management services commonly used outside the United States include which of the following?
I. Interest-bearing deposit accounts
II. Controlled disbursement systems
III.
Pooling of bank accounts
- A. I and II only
- B. I and III only
- C. II and III only
- D. I, II, and III
Answer: B
NEW QUESTION 246
A pizza restaurant chain maintains separate accounts at bank branches near each of their 1,067 restaurants to handle the deposit of cash received. Early each morning, the company's point-ofsale system electronically transmits collection totals from the previous day to its main computer. ACH debits are then initiated to concentrate the funds from the local accounts to the concentration account the following day. Recently, several of the ACH debits have been returned for insufficient funds because deposits weren't being taken to the bank on a timely basis by the local employees.
Without increasing staff at the restaurants, what could Treasury do to prevent this from happening and avoid overdrafts at the local banks?
- A. Install smart safes at each restaurant location.
- B. Use a courier to deposit to each bank 3 times per week.
- C. Use wire transfers to concentrate the cash instead of ACH.
- D. Negotiate better float schedules at its local banks.
Answer: A
NEW QUESTION 247
A put option gives the holder the right to:
- A. sell the underlying stock at the strike price.
- B. buy long shares of the underlying stock at the strike price.
- C. buy the underlying stock at the strike price.
- D. sell short shares of the underlying stock at the strike price.
Answer: A
NEW QUESTION 248
Which of the following could be considered a weakness of a forecast derived by regression analysis?
- A. It is only valid for long-term forecasting.
- B. More than one factor may affect the event being measured.
- C. A large amount of data is required.
- D. Seasonality cannot be incorporated into the forecast.
Answer: C
NEW QUESTION 249
Which of the following companies would be MOST LIKELY to use a wholesale lockbox?
- A. A mortgage company
- B. A cable television company
- C. A credit card company
- D. A chemical company
Answer: D
NEW QUESTION 250
BF Company, a manufacturer of food products, reported financial information shown in the table below for the end of the year.
BF Company is subject to covenants under its revolving credit facility. It is in compliance with which of the following?
- A. Dividends cannot exceed 15% of retained earnings
- B. Maximum debt to tangible net worth ratio of 1.5:1
- C. Minimum times interest earned of 3.0 times
- D. Minimum current ratio of 1.25:1.0
Answer: D
NEW QUESTION 251
A real estate development company has excess cash that it would like to invest in one of its properties:
-Property A has shown an ROI of 40%, a residual income of $25,675, and an EVA of $32,678. -Property B has shown an ROI of 45%, a residual income of $27,635, and an EVA of $29,523. -Property C has shown an ROI of 55%, a residual income of $22,658, and an EVA of $30,678. -Property D has shown an ROI of 52%, a residual income of $19,675, and an EVA of $31,523.
In which property should the company invest?
- A. Property B
- B. Property A
- C. Property C
- D. Property D
Answer: B
NEW QUESTION 252
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