Free CTP Braindumps Download Updated on Aug 28, 2023 with 932 Questions
AFP CTP Exam Practice Test Questions
NEW QUESTION # 20
A small for-profit, start-up company is designing a retirement plan with the goal of minimizing costs and operating income volatility while providing a qualified retirement savings vehicle. Which of the following would be the BEST choice?
- A. Hybrid plan
- B. Internal Revenue Code 401(k) plan
- C. Defined benefit plan
- D. Internal Revenue Code 403 (b) plan
Answer: B
NEW QUESTION # 21
A major toy retailer operates 65 retail stores throughout the Midwest. Which of the following credit terms is MOST LIKELY to be offered to this company by its suppliers?
- A. Factoring
- B. Seasonal dating
- C. Letter of credit
- D. Floor planning
Answer: B
NEW QUESTION # 22
A treasurer has been advised that his privately held company has just lost its largest customer, which will have a significant impact on earnings. The treasurer applies an aggressive working capital strategy. Presently, the yield curve is upward sloping. Given this information, the treasurer should ensure that the company has:
- A. long-term non-committed lines.
- B. short-term non-committed lines.
- C. short-term committed lines.
- D. long-term committed lines.
Answer: C
NEW QUESTION # 23
A cash manager at a U.S. retailer forecasts a positive collected cash position for the end of the current day. The company has an overdraft facility at 10%, a separate investment account earning 8% before taxes, an earnings credit rate of 8% and an outstanding single payment note at 9.5% maturing in 1 week. This month's bank service fees are expected to exceed the earnings credit. Which of the following options would be the MOST economically positive for the company?
- A. Leave the funds in the account.
- B. Redeem the single payment note.
- C. Transfer funds to the investment account.
- D. Prepay administrative expenses.
Answer: A
NEW QUESTION # 24
In an organization with personnel limitations, which of the following strategies should be considered to mitigate cash management system risk?
- A. Verification
- B. Hedging
- C. Outsourcing
- D. Matching
Answer: C
NEW QUESTION # 25
Which of the following is NOT a drawback to using ROI as a performance measure?
- A. It may lead to rejection of a positive NPV project.
- B. It does not include a charge for cost of capital.
- C. It may be misleading when cash flows are not evenly distributed over time.
- D. It does not consider the profit generated by a project.
Answer: D
NEW QUESTION # 26
Some treasury management systems are capable of initiating investment purchases and loan drawdowns automatically. The automating of these transactions is related to which of the following treasury management functions?
- A. Liquidity management
- B. Capital budget management
- C. Payment management
- D. International trade management
Answer: A
NEW QUESTION # 27
A publicly held U.S. company has reported at the beginning of the year that it expects to
increase shareholder value by 5%. The current expectations are for interest rates to remain steady with a decline in fourth quarter. Treasury policy requires that investments be 90 days or less and investment grade. How should the company invest excess cash to support this goal?
- A. 16-week U.S. Treasury bill
- B. Commercial paper
- C. High-yield bonds
- D. BB rated bond
Answer: B
NEW QUESTION # 28
A company has made an investment of $30,000, which matures in 180 days and pays $800 in interest. Which of the following is the effective annual yield?
- A. 5.33%
- B. 1.31%
- C. 1.33%
- D. 5.40%
Answer: D
NEW QUESTION # 29
The right of stockholders to purchase, on a pro-rata basis, any new shares issued by the company is referred to as:
- A. preemptive right.
- B. existing ownership right.
- C. right of first refusal.
- D. prevention of dilution right.
Answer: A
NEW QUESTION # 30
A French company conducts business strictly within the euro zone (the EMU). Which type of risk is of LEAST concern?
- A. Regulatory
- B. Payment
- C. Terrorist
- D. Currency
Answer: D
NEW QUESTION # 31
A large multinational company recently implemented new processes to automate its treasury operations. If these changes were the direct result of comparing the company's practices with those of other companies, the activities could be considered an example of which of the following?
I) Liquidating
II) Re-engineering
III) Benchmarking
IV) Forecasting
- A. II and III only
- B. I, II, and IV only
- C. I and III only
- D. I, II, and III only
Answer: A
NEW QUESTION # 32
A company is experiencing the following long-term trend on a month-over-month basis: With all other income, expenses, long-term assets and liabilities remaining stable, this trend would MOST LIKELY prompt what action by the company?
- A. Repaying short-term debt
- B. Factoring accounts receivable
- C. Financing working capital requirements
- D. Reducing labor costs
Answer: A
NEW QUESTION # 33
The KEY decision in using CCD+ and CTX formats for B2B payments is:
- A. whether to use an EDI or a UN/EDIFACT protocol to transfer the value electronically.
- B. whether to keep the payment and remittance information together or separate.
- C. whether an evaluated receipts or paid-on-production technique is being used for the transfer.
- D. whether to use the Internet or an EDI spoke to transmit electronic payments.
Answer: B
NEW QUESTION # 34
Which of the following cash concentration transfers is MOST LIKELY to result in a bank ledger overdraft?
- A. An ACH transfer of one-day available funds
- B. An ACH transfer of anticipated deposits
- C. A DTC of current day's lockbox deposits
- D. A wire transfer of prior day's balances
Answer: B
NEW QUESTION # 35
The risk of one bank failing and endangering the liquidity of other banks is called:
- A. receiver risk.
- B. sender risk.
- C. systemic risk.
- D. daylight overdraft risk.
Answer: C
NEW QUESTION # 36
Which of the following is an advantage of a centralized treasury function?
- A. It optimizes risk and portfolio management.
- B. Policy setting is determined by local offices.
- C. Regional offices are responsible for disbursements.
- D. It reduces subsidiary interaction.
Answer: A
NEW QUESTION # 37
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