AFP CTP Exam Questions Instant Access - No Installation Required

Question 1

A small regional bank is losing market share in fiduciary services and the CEO has decided to scale back the trust department. Which of the following is considered a core service of a trust department?

APaying agent for dividend and interest payments

BMonitoring compliance with audit procedures

CProviding consulting services in debt origination

DProcessing drafts for collection.

Answer : A

Question 2

A company has been in business for five years and has decided it is time to go public. For the last five years, the company has not concentrated on documenting internal controls and operating procedures. What position will the company need to create to manage this function?

AManager of operations

BChief operating officer

CRisk manager

DInternal auditor

Answer : B

Question 3

A bank is evaluating the credit risk for a company seeking to optimize costs and originate a high volume of outgoing ACH payments. What is the BEST provision the bank should establish to control its credit exposure?

AAn intraday credit limit for the company

BA limit on the number of items processed per day

CAn overdraft facility for the company

DA standby letter of credit for the company

Answer : A

Question 4

Why would a company establish a short-term credit facility?

AShort-term interest rates are expected to rise.

BThe company would like to improve bank relationships.

CCash shortages are being forecasted due to seasonality.

DThere is an anticipated failure of the company's main depository bank.

Answer : C

Question 5

In evaluating alternative capital investments, a company should consider qualitative factors such as:

Aprojected cash flows.

Bestimated economic returns.

Ccorporate strategy.

Destimated costs.

Answer : C

Question 6

For newly issued debt, a company's effective cost of debt is a function of yield to maturity and:

Athe credit rating of the company.

Bthe marginal tax rate of the company.

Cthe maturity date of the debt instrument.

Dthe price of the debt instrument.

Answer : B

Question 7

A company is looking to improve its collection rate of returned checks. If the company implements re-presented check entry (RCK) with its bank, it might see a reduction in what type of returned items?

AConsumer payments less than $2,500

BCorporate payments less than $2,500

CConsumer payments more than $2,500

DCorporate payments more than $2,500

Answer : A

AFP Certified Treasury Professional CTP Exam Questions