[Oct 22, 2021] AFP CTP Real Exam Questions and Answers FREE
Pass AFP CTP Exam Info and Free Practice Test
NEW QUESTION 222
Which of the following is NOT characteristic of commercial paper with a term of less than 270 days?
- A. It is usually sold through a dealer.
- B. It is considered an unsecured promissory note.
- C. It must be registered with the SEC.
- D. It typically costs less than bank debt.
Answer: C
NEW QUESTION 223
When a company announces a significant and unexpected dividend increase, it signals to the market that management expects:
- A. earnings in future periods will be lower than in past periods.
- B. to split the stock in future periods.
- C. earnings in future periods will be higher than in past periods.
- D. earnings in future periods will not change.
Answer: C
NEW QUESTION 224
Refer to the following information about a company at the end of its fiscal year.
The before-tax cost of long-term debt is 10% and the cost of equity is 12%. The marginal tax rate is 35%.
What is the company's long-term debt to total capitalization ratio?
- A. 0.67
- B. 0.44
- C. 0.78
- D. 0.73
Answer: A
NEW QUESTION 225
A construction company just received a notification from its bank advising it of an altered dollar amount on a check. This notification is MOST LIKELY the result of:
- A. reverse positive pay.
- B. the use of controlled disbursement.
- C. the use of positive pay.
- D. automated reconciliation services.
Answer: C
NEW QUESTION 226
The risk of one bank failing and endangering the liquidity of other banks is called:
- A. sender risk.
- B. systemic risk.
- C. daylight overdraft risk.
- D. receiver risk.
Answer: B
NEW QUESTION 227
Companies that seek out other companies that have successfully redesigned their operations are engaging in a process called:
- A. re-engineering.
- B. benchmarking.
- C. outsourcing.
- D. continuous improvement.
Answer: B
NEW QUESTION 228
Following the latest round of cost-cutting measures at ABC Corporation, the Treasury Department retained a headcount of 2 individuals. While the analyst was out sick, she gave her password to her Manager so that payments could be released via the bank's wire transfer system. The Manager sent 3 wires out with incorrect banking instructions. The problem was not identified until the angry suppliers called several weeks later demanding payment. The corporation has not yet recovered the $130,000 sent to erroneous accounts. In this instance, which control failed for ABC Corp.?
- A. Reconciliation of the bank statement
- B. Three-way matching
- C. Security within the bank's wire system
- D. Segregation of duties
Answer: D
NEW QUESTION 229
BEA Company has determined its breakeven dollar amount for concentrating remote funds is $550.00. BEA Company has a daily earnings rate of 6% and gains one day of
accelerated funds. If a wire costs BEA $35.00 dollars, what is the cost of an electronic funds transfer for BEA Company?
- A. $1.00
- B. $2.00
- C. $4.00
- D. $3.00
Answer: B
NEW QUESTION 230
If JPY120.14 = U.S.$1.00 and EUR .7564 = U.S.$1.00, how many JPY = EUR1.00?
- A. JPY120.8964
- B. JPY90.874
- C. JPY158.831
- D. JPY.00629
Answer: C
NEW QUESTION 231
An accounts receivable manager has been asked to accelerate cash into her company by offering trade discount terms to its customers. Her company's cost of capital is 11%. If she offers terms of 2/10, net 30 on a $50,000 invoice, what is the present value to the company if the customer accepts the discount and pays early?
- A. $48,121
- B. $48,852
- C. $48,366
- D. $47,996
Answer: B
NEW QUESTION 232
Which of the following is an example of a passive investment strategy?
- A. Riding the yield curve
- B. Purchasing an interest rate swap
- C. Utilizing a dividend capture program
- D. Investing in overnight repurchase agreements
Answer: D
NEW QUESTION 233
An employer wishing to reduce operating income volatility would MOST LIKELY offer what type of retirement option to its employees?
- A. Defined contribution plan
- B. Defined benefit plan
- C. Cash balance plan
- D. Retirement bonus plan
Answer: A
NEW QUESTION 234
Which of the following is a type of borrowing between a company and a lender in which the paperwork connected with it is used to simplify the lending process?
- A. Master note
- B. Commercial paper
- C. Securitization
- D. Trade credit
Answer: A
NEW QUESTION 235
Given a corporate tax rate of 34%, a tax-exempt yield of 7% is equivalent to a taxable yield of:
- A. 7.0%.
- B. 4.6%.
- C. 10.6%.
- D. 34.0%.
Answer: C
NEW QUESTION 236
The CFO asks the Treasurer to create a new collections and concentration policy for their company. Following implementation of the policy, the company finds that reporting of receivables values is taking 10% longer, with no improvement in the company's cash flow or liquidity. What step in developing the policy could have been executed better?
- A. Approval of the policy
- B. Drafting the policy
- C. Identify issues and conduct analysis
- D. Procedure implementation
Answer: C
NEW QUESTION 237
A netting system can be used for all of the following EXCEPT:
- A. intracompany transactions.
- B. foreign exchange transactions.
- C. third-party payments or receipts.
- D. giro payments.
Answer: D
NEW QUESTION 238
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 common stock.
- D. Issue convertible debentures.
Answer: C
NEW QUESTION 239
An internal auditor discovers that employees can enter and approve their own wire transfers. This practice violates what internal control?
- A. Adequate segregation of duties
- B. Accurate reporting of cash transactions
- C. Appropriate monitoring of covenant compliance
- D. Proper authorization of investment transactions
Answer: A
NEW QUESTION 240
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