[Dec 18, 2021] Dumps Collection CTP Test Engine Dumps Training With 932 Questions
AFP CTP Dumps - 100% Cover Real Exam Questions
NEW QUESTION 212
ABC Company is an energy-holding company which owns a number of regulated power utilities that have monopolies in different regions. The majority of the holding company's income is realized from investment portfolios. The company has done well and is going to report its overallperformance to the public. What performance evaluation processes should management use to measure portfolio performance?
- A. Determining the return on equity of the company
- B. Calculating the total return of the portfolio
- C. Establishing market index benchmarks
- D. Benchmarking against competitors
Answer: C
NEW QUESTION 213
Upon entering into an interest rate swap with a notional principal of $10,000,000, what is the initial amount of money the counterparties must exchange at the beginning of the swap?
- A. $5,000,000
- B. The future value of $10,000,000
- C. $0
- D. $10,000,000 discounted
Answer: C
NEW QUESTION 214
A multinational corporation (MNC) moving all of its Mexican peso-denominated revenues into a lower tax-rate jurisdiction could adopt any of the following treasury practices EXCEPT:
- A. a notional pooling program.
- B. licensing fees to subsidiaries.
- C. an in-house bank.
- D. a shared service center.
Answer: A
NEW QUESTION 215
A firm's air conditioning unit breaks down unexpectedly and must be replaced immediately. What type of liquidity requirement is this an example of?
- A. Opportunity
- B. Speculative
- C. Transaction
- D. Precautionary
Answer: D
NEW QUESTION 216
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 217
All of the following are examples of treasury management system transactions for liquidity management EXCEPT:
- A. FX transactions.
- B. investment sales.
- C. loan paydowns.
- D. loan draw-downs.
Answer: A
NEW QUESTION 218
A currency is said to trade at a discount if it is worth:
- A. less in the forward market than in the spot market.
- B. less today than one year hence.
- C. less than its face value.
- D. less in the futures market than in the forward market.
Answer: A
NEW QUESTION 219
Treasury policies and procedures should include responsibilities for:
- A. approving department salary increases.
- B. determining when dividends should be paid.
- C. key personnel in the treasury organization.
- D. evaluating alternative capital projects.
Answer: C
NEW QUESTION 220
The following information about a company is at the end of its fiscal year.
The before-tax cost of long-term debt is 10% and the cost of equity is 12%. The marginal tax rate is 35%. The company's current ratio is:
- A. 0.46.
- B. 0.93.
- C. 0.59.
- D. 1.37.
Answer: D
NEW QUESTION 221
ABC Company is considering investing in new production technology. ABC has projected that the investment would add $5,000,000 in additional operating profit and that the resulting balance sheet would show $7,000,000 in long-term debt and $11,000,000 in total equity. ABC has a 34% tax rate and a 10% WACC. Which of the following is the investment's EVA?
- A. $2,200,000
- B. $1,500,000
- C. $3,500,000
- D. $3,300,000
Answer: B
NEW QUESTION 222
Which two of the following are necessary to calculate average collected balances?
I) Deposit float
II) Reserve requirements
III) Ledger balance
IV) Earnings credit rate
- A. I and II
- B. I and III
- C. II and IV
- D. III and IV
Answer: B
NEW QUESTION 223
Senior management at ABC Company plans to make a large capital expenditure to bolster its infrastructure exactly one year from now. Their primary concern is to preserve the current capital position until the expected cash outlay. The majority of the cash at ABC Company is held in treasury notes, but management would like to also invest some of the money into corporate bonds and money market funds. Which investment objective BEST suits the needs of ABC Company?
- A. Liquidity
- B. Diversification
- C. Safety
- D. Exposure Horizon
Answer: C
NEW QUESTION 224
Which of the following would be true for a company with high operating leverage?
- A. Its cost of goods sold does not increase as revenues increase.
- B. It has high variable costs per unit sold.
- C. If revenues increase marginally, it can achieve a large percentage increase in profits.
- D. Its semi-variable costs do not have a fixed cost component.
Answer: C
NEW QUESTION 225
Components of a field banking system include which of the following?
I. Local bank
II. Concentration bank
III.
Lockbox bank
- A. I, II, and III
- B. I only
- C. I and II only
- D. II and III only
Answer: C
NEW QUESTION 226
A multinational company (MNC) that operates a shared service center charges its foreign subsidiaries a management fee. This management fee may need to be:
- A. significantly taxed by the host government.
- B. negotiated with the host government.
- C. manipulated to locate profits in low-tax countries.
- D. paid through a third-party intermediary.
Answer: B
NEW QUESTION 227
Which of the following is an important component of corporate governance?
- A. The existence of a large number of institutional investors
- B. The level of compliance with GAAP
- C. The activities of independent outside auditors
- D. The existence of a matrix management structure
Answer: C
NEW QUESTION 228
Which of the following will exempt commercial paper from SEC registration?
I) A maturity of fewer than 270 days
II) A rating grade of A-1 or P-1
III) Distribution through a licensed dealer
IV) Backing by a U.S. bank letter of credit
- A. I only
- B. I and II only
- C. II, III, and IV only
- D. IV only
Answer: A
NEW QUESTION 229
A utility company is evaluating whether or not it should build a new plant. The process of reviewing the quantitative and qualitative factors are an example of which finance function?
- A. Financial risk management
- B. Funding
- C. Financial planning
- D. Capital budgeting
Answer: D
NEW QUESTION 230
A UK based manufacturer has a subsidiary in Belgium and a manufacturing plant in Italy. The subsidiary wants to sell its products in Sweden. How would the UK parent best structure the movement of funds within the organization to optimize management of working capital while ensuring recourse?
- A. Internal factoring
- B. Multilateral netting
- C. Re-invoicing
- D. Export financing
Answer: A
NEW QUESTION 231
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. Factoring accounts receivable
- B. Financing working capital requirements
- C. Reducing labor costs
- D. Repaying short-term debt
Answer: D
NEW QUESTION 232
Which of the following is a source of short-term financing?
- A. Factoring of accounts receivable
- B. Bond issuance
- C. Retaining profits
- D. Issuance of common stock
Answer: A
NEW QUESTION 233
A company with a relatively poor credit rating borrows most of its funds with short maturities. They may want to change its exposure to interest rates to more correctly reflect the long-term nature of the projects it is funding. Or, they may believe that long-term interest rates are going to rise, causing it to seek protection against the impact of higher
interest rates on its balance sheet. Which of the following would be a solution?
- A. Currency option
- B. Futures contract
- C. Forward contract
- D. Interest rate swap
Answer: D
NEW QUESTION 234
A company is starting a project to redesign its cash management information systems. What would be an important tool in this effort?
- A. Treasury workstation
- B. Treasury operations manual
- C. ERP software
- D. Cash application
Answer: B
NEW QUESTION 235
After several internal discussions about treasury management systems (TMSes), ABC Company has determined that it has no need for customization but that it does want a backup for high priority capabilities. The company wants to reduce its IT costs and resources but still have IT support with in-depth knowledge of the solutions available. These parameters will MOST LIKELY result in what kind of TMS?
- A. An ERP module TMS
- B. Development of its own TMS
- C. An integrated TMS
- D. A hosted ASP TMS
Answer: D
NEW QUESTION 236
In a typical swap transaction, two parties agree to exchange:
- A. cash flows at future points in time.
- B. notional principal amounts.
- C. amortization schedules.
- D. maturity dates of obligations.
Answer: A
NEW QUESTION 237
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