PDF (New 2021) Actual AFP CTP Exam Questions
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NEW QUESTION 160
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. I and III only
- B. II and III only
- C. I, II, and IV only
- D. I, II, and III only
Answer: B
NEW QUESTION 161
Which of the following can be considered key responsibilities of daily cash management?
I. Overseeing compensation for bank services
II. Management of short-term borrowing and investing
III.
Projecting future cash shortages and surpluses
- A. I and II only
- B. II and III only
- C. I only
- D. I, II, and III
Answer: D
NEW QUESTION 162
ABC Company, a publicly held U.S. multinational, owns several manufacturing plants in Latin America as well as several ships to transport its products globally. 60% of its sales are from its euro-based subsidiaries. The company uses various derivative instruments to mitigate exposure to fluctuations in fuel prices and FX rates. The hedging deals are long-term and placed with many counterparties. ABC Company is also a net borrower and has a syndicated credit facility in place. Which of the following actions to mitigate counterparty risk would MOST benefit the company?
- A. Add to the number of counterparties to increase diversification.
- B. Eliminate specific AAA rated counterparties.
- C. Adopt a third-party custodian for investments.
- D. Implement or adjust single counterparty balance limits.
Answer: D
NEW QUESTION 163
An employee earning $80,000 per year decides to begin contributing to his company's 401(k) plan effective January 1st. Assuming he is in the 25% tax bracket, contributes 15% of his pay into the plan each month and receives a company match of $0.50 for every dollar he contributes, what is his taxable compensation that year?
- A. $74,000
- B. $68,000
- C. $51,000
- D. $80,000
Answer: B
NEW QUESTION 164
Which of the following is LEAST likely to appear on an account analysis?
- A. Money market rate
- B. Service charges
- C. Earnings allowance rate
- D. Average float balance
Answer: A
NEW QUESTION 165
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. Commercial paper
- B. Securitization
- C. Master note
- D. Trade credit
Answer: C
NEW QUESTION 166
Bank A is to pay Bank B $6,000,000 for 10 transactions that occurred throughout the day. Bank B is to pay Bank C $8,000,000 for 13 transactions that occurred throughout the day. Bank B is to pay Bank A $5,000,000 for 17 transactions that occurred throughout the same day. These banks operate using a gross settlement system. How many transactions will
occur between these banks to settle the payments?
- A. 0
- B. 1
- C. 2
- D. 3
Answer: A
NEW QUESTION 167
All of the following are basic considerations for balance compensation by a company EXCEPT:
- A. annuity factors.
- B. relationship management.
- C. differential charges.
- D. budgeting.
Answer: A
NEW QUESTION 168
Company Sales Figures:
--------
10% of sales collected in the current month of the sale
45% of sales collected in the month after the sale
30% of sales collected two months after the sale
15% of sales collected three months after the sale
January Sales $300,000
February Sales $250,000
March Sales $400,000
April Sales $450,000
Based on the information above, what is the estimate for the company's April cash flows?
- A. $330,000
- B. $1,070,000
- C. $1,055,000
- D. $345,000
Answer: D
NEW QUESTION 169
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. Internal Revenue Code 403 (b) plan
- B. Internal Revenue Code 401(k) plan
- C. Defined benefit plan
- D. Hybrid plan
Answer: B
NEW QUESTION 170
Which of the following payment instruments can provide predictable collection float?
I.Wire transfer II.Check III.ACH IV.Cash
- A. I, III, and IV only
- B. IV only
- C. III only
- D. I, II, and IV only
Answer: A
NEW QUESTION 171
A company has grown quickly in the euro zone market. It wants to maximize its excess cash. Which would be the BEST method of concentrating funds?
- A. Bank Overlay
- B. Scheduled Transfer
- C. Physical Pooling
- D. Notional Pooling
Answer: C
NEW QUESTION 172
A company has a $300,000 credit line of which $200,000 was the average amount outstanding for the year. The terms of the loan include a 1/2 of 1% commitment fee on the unused portion, an interest rate of 10%, and a compensating balance requirement of 2% of the total credit line. The company's compensating balances are funded from credit-line borrowings.
What is the effective annual interest rate on the net usable funds?
- A. 10.31%
- B. 10.57%
- C. 10.25%
- D. 10.00%
Answer: B
NEW QUESTION 173
A company has decided to manage its short-term investment portfolio in-house. It is looking for enhanced capital gains as well as the ability to sell the instruments on the secondary market at a premium. The investment manager has forecasted the interest rates shown below:
Which investment strategy should be employed by the company?
- A. Tax-based strategy
- B. Total-return strategy
- C. Matching strategy
- D. Passive strategy
Answer: B
NEW QUESTION 174
XYZ Corporation's current ledger balance of the controlled disbursement account is $1,286,500. Based on the information in the table,
what will the corporation's available balance be at the end of today?
- A. $434,706
- B. $126,744
- C. $1,748,473
- D. $(251,527)
Answer: B
NEW QUESTION 175
Which of the following is a PRIMARY responsibility of a company's risk management function?
- A. Liquidity monitoring
- B. Auditing
- C. Leasing
- D. Insurance
Answer: D
NEW QUESTION 176
The MOST common way that companies structure their treasury operations is as a:
- A. cost center.
- B. in-house bank.
- C. profit center.
- D. shared service center.
Answer: A
NEW QUESTION 177
XYZ Company is a publicly held manufacturing company that has decided to branch out into the international market. Five million dollars is needed to set up management and hire the factory workers, $2 million for various government certifications in order to begin business in Poland, and $1 million for miscellaneous expenses. While looking for funding, XYZ found that local banks in Poland were not willing to provide financing without which of the following?
- A. A Full Guarantee
- B. A Certified Workers Compensation Policy
- C. A Comfort Letter
- D. A Personal Guarantee from the CEO
Answer: A
NEW QUESTION 178
All of the following are an EDI benefit EXCEPT:
- A. lower start-up costs.
- B. lower error rates.
- C. improved cash forecasting.
- D. improved productivity.
Answer: A
NEW QUESTION 179
Two months after a government overthrow, the new Minister of Industry and Culture took over the country's largest steel company and compensated the owners at 50% of book value. What is the government's action called?
- A. Nationalization
- B. Consolidation
- C. Deregulation
- D. Expropriation
Answer: D
NEW QUESTION 180
ABC Company, a U.S. company, has an overseas customer, XYZ Inc., who wants to purchase $3.1 million of equipment from ABC Co. XYZ Inc. wants to structure payment by paying 10% at time of order, 40% at time of shipment and the remaining 50% at time of receipt of the equipment. The last time XYZ Inc. purchased equipment from ABC Co. they never paid the final 50%, claiming the equipment did not work properly. Which of the following can ABC Co. use for this transaction to guarantee payment?
- A. Commercial letter of credit
- B. Performance guarantee
- C. Documentary collection
- D. Installment credit
Answer: A
NEW QUESTION 181
All of the following would encourage a company operating nationwide to develop multiple banking relationships EXCEPT:
- A. administrative cost savings.
- B. availability of specialized services.
- C. geographic proximity.
- D. enhanced credit availability.
Answer: A
NEW QUESTION 182
A nationwide retailer has been making EFT payments to its suppliers for several years. It will expand its processes to include consumer payments in its EFT initiative. Which of the following will support this initiative at the point-of-sale?
- A. Consumer-to-business
- B. Check truncation
- C. Paid-on-production
- D. Prearranged payment
Answer: B
NEW QUESTION 183
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