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AFP CTP Certified Treasury Professional 10 Q&A

Version 3.0

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-2- Q: 1 Which of the following are important uses of variance analysis in comparing actual cash flows with projected cash flows? I. Identifying unanticipated changes in inventory II. Enhancing short-term investment income III. Validating a capital budget IV. Identifying delays in accounts receivable collections

A. I and II only B. I and IV only C. II and IV only D. I, II, III, and IV

Answer: B Q: 2 An instrument that gives the right to buy a stated number of shares of common stock at a specified price is known as:

A. an equity warrant B. a put option C. a zero coupon bond D. a subordinated debenture

Answer: A

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-3- Q: 3 A company plans to issue additional equity within the next 12 months but needs to issue debt at a low interest rate now. Which of the following instruments would BEST meet this objective?

A. Convertible bonds B. Private placement issue C. Preferred stock D. Subordinated debentures

Answer: A Q: 4 A put option on a company's stock has an exercise price of $20. On the delivery date, the stock is trading at $24 per share. What should the investor who has paid $2 for the option do?

A. Not exercise the option and lose $2. B. Not exercise the option and lose $6. C. Exercise the option and gain $2. D. Exercise the option and gain $4.

Answer: A Q: 5 A call option for a company has an exercise price of $50. The stock is currently trading at $60. At maturity, what should an investor who paid $3 for the option do?

A. Exercise the option and gain $7. Leading the way in IT testing and certification tools,


B. Exercise the option and gain $10. C. Not exercise the option and lose $3. D. Not exercise the option and lose $13.

Answer: A Q: 6 In a typical swap transaction, two parties agree to exchange:

A. notional principal amounts. B. amortization schedules. C. maturity dates of obligations. D. cash flows at future points in time.

Answer: D Q: 7 A Chicago meat processor is concerned about the volatility of pork belly prices. Which of the following derivative products would be used to fix these prices within a given range?

A. Collar B. Swap C. Cap D. Spot purchase

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Answer: A Q: 8 On the basis of the following exchange rates, which of the following currency amounts has the greatest value in U.S. dollars?

A. C$750,000 B. ¡ê850,000 C. ?00,000 D. £¤5,000,000

Answer: B Q: 9 Which of the following is a characteristic of giro systems used in countries in Europe?

A. They operate through their postal systems. B. They are primarily used for company-to-company payments. C. They do not replace checks for the payment of bills. D. They do not allow the use of direct debits and credits. Leading the way in IT testing and certification tools,


Answer: A Q: 10 Netting is used by which of the following as a cross-border payment technique?

A. European giro providers B. Foreign subsidiaries of a company C. Counterparties in a letter of credit transaction D. TARGET participants

Answer: B

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Topcerts CTP Exam - Certified Treasury Professional  

Topcerts offers AFP CTP questions and answers for your Certified Treasury Professional exam preparation. Download CTP free sample to check t...