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Introduction to AFP CTP: Certified Treasury Professional Exam
The word CTP refers to a professional certification granted to those skilled in cash management, passing an examination proving their competence by the Accounting Professional Body (AFP). Successful candidates have the privilege over a period of three years to use the CTP designation with their names, which may enhance employment prospects, reputation and income. CTPs operate in a number of areas, including administration of treasuries, corporate services. Individuals with expertise in cash management are granted the certified professional certification for treasury. Persons must complete an exam that demonstrates their competence by the Accounting Professionals Association. Those that are designated tend to make more salary, have a higher work stability and can promote themselves better in the business. The CTP designation has been effective for 3 years and has to be recertified. CTP classification candidates should use the profile of expertise to understand the extent of the abilities, knowledge and skills required to perform and to evaluate the classification for their enthusiasm and relevance to their work and profession. The CTP test is a closed-book examination consisting of 170 questions that may be answered on a computer. Applicants must finish the exam for four hours. The standards for the AFP Certification Exams are based on evaluations of those assessments and the evaluation plans included in section B only of the material in the Competence Account. AFP CTP exam dumps cover all the requirements of the examination.
NEW QUESTION 84
Which of the following is NOT a method multinational companies (MNC) use to repatriate capital?
- A. Dividends
- B. Internal factoring
- C. Management fees
- D. Transfer pricing
Answer: B
NEW QUESTION 85
The use of debt to finance a company is called:
- A. risk-adjusted cost.
- B. cost of debt.
- C. financial leverage.
- D. borrowing cost.
Answer: C
NEW QUESTION 86
An intern was hired by the Vice President of Accounts Payables to process the electronic payments that come through the bank. The intern is responsible for manually entering payee information into the system at each step of the process. The VP directed the intern to enter the information as fast as possible without mistakes to optimize the number of transactions that could be processed. Instead of manually entering information the VP should have utilized:
- A. straight-through processing.
- B. continuous linked settlement.
- C. large value transfer system.
- D. enterprise resource planning system.
Answer: A
NEW QUESTION 87
An inverted yield curve occurs when which of the following is true?
- A. As rates on current issues rise, the price of existing issues falls.
- B. The longer the maturity of the investment, the lower the rate of return.
- C. The longer the maturity of the investment, the greater the risk of a price decline.
- D. In anticipation of lower long-term rates, investors push short-term rates down.
Answer: B
NEW QUESTION 88
A multidivisional domestic company with centralized treasury decision-making can potentially utilize intra-company lending to:
- A. lower the overall cost of short term funds.
- B. establish individual subsidiary borrowing facilities.
- C. reduce the overall liquidity of the company.
- D. source debt in different currencies.
Answer: A
NEW QUESTION 89
A company purchases a machine tool with an expected life of 3 years. Under the accrual accounting method, the equipment would be treated in which of the following ways?
- A. As a purchase, netted against retained earnings
- B. As an asset, recorded on the balance sheet at acquisition cost and depreciated
- C. As an asset, recorded on the balance sheet at purchase price and amortized
- D. As a purchase, recorded as an operating expense in the current period
Answer: B
NEW QUESTION 90
The company's monthly credit sales are in Table 1 and its receivables collection pattern is in Table
2. If this company wishes to achieve a second quarter (April-June) DSO of 60 days, what would its ending accounts receivable balance need to be?
Assume a 90-day quarter.
- A. $1,500,000
- B. $666,667
- C. $3,000,000
- D. $1,333,333
Answer: D
NEW QUESTION 91
On the basis of the data above, what is the forecast for Thursday's cash receipts, under the exponential smoothing method?
- A. $122
- B. $120
- C. $130
- D. $110
Answer: B
NEW QUESTION 92
A company has a high value for its current ratio. What does this suggest in terms of liquidity and risk?
- A. Weak liquidity position and relatively low risk
- B. Strong liquidity position and relatively low risk
- C. Weak liquidity position and relatively high risk
- D. Strong liquidity position and relatively high risk
Answer: B
NEW QUESTION 93
Based on the above information, before making the major acquisition, several large institutional shareholders have asked management to consider all of the following EXCEPT:
- A. a special dividend.
- B. a stock split.
- C. a stock dividend.
- D. a stock repurchase.
Answer: B
NEW QUESTION 94
The Treasurer of PJB Company is in charge of implementing new treasury management software. Without issuing any RFPs, the Treasurer hires a consulting company to install the software and program it to suit the company's needs. The Treasurer is responsible for approving the consultant's invoices for payment. Through conversation, the CFO discovered that the Treasurer's relative is one of the partners at the consulting company. The Treasurer was immediately terminated. What did the Treasurer MOST LIKELY violate?
- A. The Uniform Commercial Code
- B. The corporate code of conduct
- C. Sarbanes-Oxley controls
- D. Treasury operations procedures
Answer: B
NEW QUESTION 95
Company ABC has recently started to experience a significant reduction in funds availability. Which of the following is MOST LIKELY to reduce funds availability?
- A. Ledger balances have increased.
- B. Company negotiated a later availability schedule.
- C. Deposits are arriving at bank later, but prior to cutoff time.
- D. Company no longer pre-encodes its checks for deposit.
Answer: D
NEW QUESTION 96
ABC Company is a national retail company and uses XYZ Bank for its collections and payroll services. XYZ has recently experienced financial problems; what is the greatest risk to ABC Company?
- A. Deterioration of service quality
- B. Loss of assets
- C. Damage to their working relationship
- D. Increase in service fees
Answer: B
NEW QUESTION 97
According to the Capital Asset Pricing Model, which of the following would increase the required rate of return, given a beta of 1?
- A. A decrease in the expected market return
- B. An increase in the company's stock price
- C. A decrease in the tax rate
- D. An increase in the T-bill rate
Answer: D
NEW QUESTION 98
A U.S. corporation has annual revenues of $500 million and a corporate tax rate of 15%. It has subsidiaries in Country A and Country B.
Subsidiary A has annual revenues of $50 million. Subsidiary B has annual revenues of $20 million. The parent company has asked the Subsidiary A to transfer the equivalent of $10 million to Subsidiary B.
There is a 5% withholding tax in Country A and a 3% withholding tax in Country B.
How much withholding tax will the company owe as a result of this transaction?
- A. $300,000
- B. $500,000
- C. $800,000
- D. $200,000
Answer: B
NEW QUESTION 99
If JPY120.14 = U.S.$1.00 and EUR .7564 = U.S.$1.00, how many JPY = EUR1.00?
- A. JPY158.831
- B. JPY120.8964
- C. JPY90.874
- D. JPY.00629
Answer: A
NEW QUESTION 100
A U.S.-based electronics company that buys components from one of its foreign subsidiaries at a price above market is likely to:
- A. be paid large dividends by the subsidiary.
- B. be sheltering profits in a low-tax country.
- C. need tax consultants to act as intermediaries.
- D. make payment with an intracompany loan.
Answer: B
NEW QUESTION 101
-----
A company has negotiated a credit facility with the following terms:
$5,000,000 line of credit $3,000,000 average borrowing 30 basis point commitment fee on the unused portion of the line Interest rate on advances is 1-month LIBOR plus 4% 1-month LIBOR is currently 2%
What is the annual interest rate on the line of credit?
- A. 6.2%
- B. 9.3%
- C. 9.0%
- D. 6.0%
Answer: A
NEW QUESTION 102
What is the premium (price) for an oil contract, if the following conditions are present?
LIBOR rate of 5% Out of the money cost of $3 Strike price is $4 In the money price of $1 Speculative premium of $2
- A. $7.35
- B. $3
- C. $5.25
- D. $7
Answer: D
NEW QUESTION 103
An airline has entered into an agreement with its partners to offset receivables and payables for a specified period of time and to transmit or receive the difference via funds transfer at the end of the period. This is an example of:
- A. a barter agreement.
- B. an inter-company loan.
- C. a net settlement system.
- D. trade credit.
Answer: C
NEW QUESTION 104
I) Banker's acceptances
II) Commercial paper
III) U.S. Treasury bills
IV) Federal agency securities
Which of the following is the MOST usual ranking, from lowest to highest risk, of the investments listed above?
- A. III, IV, I, II
- B. IV, II, III, I
- C. IV, III, II, I
- D. I, III, IV, II
Answer: A
Explanation:
Topic 6, Volume E
NEW QUESTION 105
From a buyer's perspective, which of the following types of float would be eliminated if checks were replaced by electronic payment methods?
- A. Invoicing
- B. Disbursement
- C. Collection
- D. Lockbox
Answer: B
NEW QUESTION 106
XYZ Company has decided to purchase a close competitor. This acquisition would make XYZ Company the 4th largest in its industry allowing it better purchasing power and greater distribution channels. After completing the M&A analysis, it is determined that the combined companies would produce a 40% increase in revenue, reduce manufacturing costs by 30%, but would increase current liabilities by 27%. Which of the following would keep the acquisition from happening?
- A. Low return on investment
- B. Increased weighted average cost of capital
- C. Negative net present value
- D. Restrictive bond covenants
Answer: D
NEW QUESTION 107
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