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NEW QUESTION 310
A company has six fraudulent checks clear its primary disbursement account for a total of $7,652. The bank agrees to split the loss with the company to maintain a good relationship. As a condition of sharing the expense, the bank requires the company to establish positive pay on its disbursement accounts or have the company absorb the losses on future fraudulent payments.
What type of risk financing technique is the bank using?
- A. Risk retention
- B. Self-insurance
- C. Crime insurance
- D. Risk transfer
Answer: D
NEW QUESTION 311
The "agency problem" refers to:
- A. stockholders who allow management to take actions that will benefit management.
- B. the internal audit function reporting to the audit committee of the board instead of to management.
- C. a large and active institutional investor base acting on behalf of individual investors.
- D. management's use of a fiduciary agent for stockholders.
Answer: A
NEW QUESTION 312
QRT Corporation uses exponential smoothing in its cash flow forecasting model. Five days are used to calculate the moving average forecast.
If the value of the smoothing constant is .60, what is the exponential smoothing forecast for day 7?
- A. $2,052,000
- B. $2,060,000
- C. $2,000,000
- D. $2,400,000
Answer: A
NEW QUESTION 313
ABC Company is a net borrower with a weighted average cost of capital of 11.5%. What kind of bank fee arrangement is it likely to prefer?
- A. Fee compensation
- B. Balance compensation
- C. Average balance compensation
- D. Average fee compensation
Answer: A
NEW QUESTION 314
Which of the following is a common approach to negotiating EDI payment terms versus paper payment terms?
- A. Offering lower discounts for electronic payments than for paper payments
- B. Offering payment terms that are float-neutral for both payment formats
- C. Making the electronic payments due earlier than paper payments
- D. Having the same due date for electronic and paper payments
Answer: B
NEW QUESTION 315
An analyst for a landscaping company wants to adjust her cash-flow forecast to account for the seasonality of outflows. How can this be accomplished?
- A. Contingency forecasting
- B. Regression analysis
- C. Simple moving average
- D. Accounts receivable balance pattern
Answer: B
NEW QUESTION 316
ABC Corporation receives images of paid check exception items from its bank and reviews them daily. What action should be taken on an item where the payee on the image does NOT match the data from ABC Corporation's accounts payable?
- A. ABC Company utilizes the holder in due course defense.
- B. No-pay decision is communicated to the bank.
- C. Image remains stored on ABC Corporation's network for future customer inquiries.
- D. Bank alerts payee that check is unmatched.
Answer: B
NEW QUESTION 317
Which of the following can be used for monitoring accounts receivables?
I. Aging schedule
II. Credit terms
III. Days' sales outstanding
IV.
Receivables balance pattern
- A. I and II only
- B. II, III, and IV only
- C. I, III, and IV only
- D. I and IV only
Answer: C
NEW QUESTION 318
When a subsidiary borrows money, the parent, sister subsidiary, or other entity is often used in order to:
- A. prevent a covenant violation.
- B. increase the return of a security.
- C. diversify the risk of the investment.
- D. guarantee the obligations of the borrower.
Answer: D
NEW QUESTION 319
Which of the following would increase if the Fed were to announce a reduction in reserve requirements?
- A. Monthly earnings credits
- B. Monthly service charges
- C. Average collected balances
- D. Fed float
Answer: A
NEW QUESTION 320
Kensley Biscuit Company Ltd. decides to invest GBP125,000 in new packaging equipment to help it keep up with increased demand. As a result of this investment, the company's annual profit improves by GBP11,763. If Kensley's cost of capital is 8.25% and its corporate tax rate is 42%, what is its residual income (RI) from the investment?
- A. GBP970
- B. GBP11,763
- C. GBP842
- D. GBP1,451
Answer: D
NEW QUESTION 321
A measure of the incremental impact of a company's investments on market capitalization is known as:
- A. return on equity.
- B. weighted average cost of capital.
- C. economic value added.
- D. working capital turnover.
Answer: C
NEW QUESTION 322
The PRIMARY difference between defined benefit and defined contribution pension plans is whether the employee or the employer:
- A. bears risk of a shortfall of the investment results in the plan.
- B. hires investment managers for the plan.
- C. receives the tax reduction benefits of the plan.
- D. decides which mutual funds are included in the plan.
Answer: A
NEW QUESTION 323
Loss exposures related to treasury management may include which of the following?
- A. Excessive product recalls
- B. Deterioration of investment principal
- C. Bank consolidations
- D. PBGC violations
Answer: B
NEW QUESTION 324
An investor concerned about taxes on dividend distributions will MOST LIKELY purchase stock on which of the following dates?
- A. Declaration date
- B. Record date
- C. Ex-dividend date
- D. Payment date
Answer: C
NEW QUESTION 325
A properly designed concentration system will potentially achieve which of the following results?
I. Increased authority to field offices
II. Increased investment income
III. Improved ability to take discounts
IV.
Reduced dependence on third-party concentration vendors
- A. I and II only
- B. II, III, and IV only
- C. IV only
- D. II and III only
Answer: D
NEW QUESTION 326
If a bank has a 10% reserve requirement, a 31-day month, and an earnings credit rate of 6.5%, which of the following is the approximate level of collected balances required to support $1.00 worth of bank service charges?
- A. $199
- B. $201
- C. $206
- D. $181
Answer: B
NEW QUESTION 327
The board of directors announces an increase in its dividend from $0.11/share to $0.15/share. Over the next two quarters, management notices that its investor base has shifted to include a large percentage of pension funds and endowment funds. This is the result of:
- A. the dividend reinvestment plan.
- B. dividend capture.
- C. the clientele effect.
- D. the ex-dividend date.
Answer: C
NEW QUESTION 328
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CTP exam questions from PrepAwayExam dumps: https://www.prepawayexam.com/AFP/braindumps.CTP.ete.file.html (932 Q&As)
Free 2021 Certified Treasury Professional CTP dumps are available on Google Drive shared by PrepAwayExam: https://drive.google.com/open?id=1HJ62K7R_SXfEDDigJgx91xM2_QOt_2Nc