AFP CTP Exam Questions - mytestengine Practice Lab

Question 1 VERIFIED

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

A. I and II only

B B. I and IV only C

C. II and IV only

D

D. I, II, III, and IV

Correct Answer: B

Explanation:

Answer: B

Question 2 VERIFIED

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

A

A. an equity warrant

B

B. a put option

C

C. a zero coupon bond

D

D. a subordinated debenture

Correct Answer: A

Explanation:

Answer: A

Question 3 VERIFIED

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

A. Convertible bonds

B

B. Private placement issue

C

C. Preferred stock

D

D. Subordinated debentures

Correct Answer: A

Explanation:

Answer: A

Question 4 VERIFIED

An arrangement in which a borrower makes periodic payments to a separate custodial account that is used to repay debt is known as a:

A

A. sinking fund

B

B. balloon payment

C

C. mortgage

D

D. zero-coupon bond

Correct Answer: A

Explanation:

Answer: A

Question 5 VERIFIED

Which of the following instruments simplifies the paperwork connected with loans that have multiple advance features?

A

A. Master note

B

B. Banker's acceptance

C

C. Indenture agreement

D

D. Note purchase agreement

Correct Answer: A

Explanation:

Answer: A

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Correct Answer: B

Correct Answer: A

Correct Answer: A

Correct Answer: A

Correct Answer: A

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