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Your Path to Success: How to Pass the AFP CTP Certified Treasury Professional Exam

Questions 201

An inverted yield curve occurs when which of the following is true?

Options:

A.

As rates on current issues rise, the price of existing issues falls.

B.

In anticipation of lower long-term rates, investors push short-term rates down.

C.

The longer the maturity of the investment, the greater the risk of a price decline.

D.

The longer the maturity of the investment, the lower the rate of return.

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Questions 202

Which of the following are primary objectives of cash forecasting?

I. Managing liquidity

II. Optimizing float

III. Enhancing financial control

IV. Minimizing borrowing costs

Options:

A.

I and II only

B.

II and III only

C.

I, III, and IV only

D.

I, II, III, and IV

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Questions 203

In a private label financing arrangement, the seller does which of the following?

Options:

A.

Commits funds to finance accounts receivable.

B.

Operates its own credit function as a subsidiary.

C.

Receives the full face value of the sale in most cases.

D.

Loses authority to decide which customers receive credit.

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Questions 204

When investing in commercial paper, the investor's primary consideration should be which of the following?

Options:

A.

Issuer's credit rating

B.

Method of settlement

C.

Interest rate risk

D.

Dealer used

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Questions 205

Which statement is typically true about cash dividends?

Options:

A.

They are an expense to the company.

B.

They are a distribution of profits.

C.

They are based on the value of the company's stock.

D.

They are declared by the chief financial officer.

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Questions 206

The ACH system eliminates float because the:

Options:

A.

transactions are value-dated.

B.

transactions are initiated electronically.

C.

receiving and originating institutions settle simultaneously.

D.

Fed charges back the cost of float.

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Questions 207

Which of the following factors is NOT used by a cash manager to estimate a target compensating balance?

Options:

A.

Per-item service costs

B.

Average volume

C.

Ledger balance

D.

Earnings credit rate

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Questions 208

Which of the following short-term instruments is used to finance the import or export of goods?

Options:

A.

Convertible bond

B.

Government warrant

C.

Bill of lading

D.

Banker's acceptance

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Questions 209

The PRIMARY objective of the AFP Account Analysis Standard is to help cash managers in which of the following areas?

Options:

A.

Automating account analysis reporting

B.

Unbundling bank charges

C.

Comparing costs among banks

D.

Setting target balances

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Questions 210

A netting system can be used for all of the following EXCEPT:

Options:

A.

intracompany transactions.

B.

giro payments.

C.

third-party payments or receipts.

D.

foreign exchange transactions.

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Questions 211

A company can use all of the following documents to establish a relationship with a bank EXCEPT:

Options:

A.

account analysis statements.

B.

account resolutions.

C.

service agreements.

D.

signature cards.

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Questions 212

Which of the following statements is true about a forward foreign exchange contract?

Options:

A.

It is a right to buy or sell foreign currency at a specified price within a fixed time period.

B.

It does not require an underlying commercial transaction because the contract trades on its own.

C.

It specifies delivery of currencies at an exchange rate established today for a currency transaction that settles more than two days in the future.

D.

It is an exchange of currencies at the outset of a transaction at a fixed rate determined by the spot markets.

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Questions 213

A convenience store chain would typically use which of the following types of collection systems?

Options:

A.

Retail lockbox

B.

Network of wholesale lockboxes

C.

Pre-authorized payment program

D.

Field deposit system

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Questions 214

In analyzing the costs for services among several banks, a cash manager should compare all of the following EXCEPT the:

Options:

A.

earnings credit rates.

B.

reserve requirements.

C.

ledger balances.

D.

fee structures.

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Questions 215

A PRIMARY objective of the cash concentration function is to:

Options:

A.

move funds to where they can be used most productively.

B.

eliminate service charges at outlying field banks.

C.

minimize the number of disbursement banks required.

D.

improve the predictability of cash outflow.

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Questions 216

All of the following statements are true about loan participations EXCEPT:

Options:

A.

more than one lender commits to them.

B.

loan advances and payments are divided among the participants.

C.

loan servicing is provided by the lead institution.

D.

they are traded in the secondary market.

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Questions 217

A cash manager should use which of the following techniques to measure the differences among cash flows with different timings and amounts?

Options:

A.

Present value calculations

B.

Yield curve analysis

C.

Return on investment

D.

Exponential smoothing

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Questions 218

The U.S. Congress established the.

Options:

A.

UCC.

B.

FinCEN.

C.

OCC.

D.

OFAC.

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Questions 219

A put option is out of the money when the asset price:

Options:

A.

is less than the strike price.

B.

exceeds the strike price.

C.

is unchanged relative to the purchase price.

D.

is equal to the strike price.

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Questions 220

Which of the following are differences between securities issued through the primary and private capital markets?

I. Cost of issuance and speed of execution

II. Investor base

III. Reasons for the offering

IV. Registration requirements

Options:

A.

I, II, and IV

B.

I and III

C.

II and IV

D.

II, III, and IV

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