Question 1

A company is considering issuing debt in a market environment in which there is a larger than normal spread between high- and low-risk investments. Among several factors, what are the concerns regarding investor behavior that the treasurer will MOST need to consider?

Options :

A : Matching maturity

B : Availability of collateral

C : Capital structure

D : Flight to quality

Answer: D

Question 2

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

Answer: C

Question 3

The owner of XYZ Company just completed an initial public offering. Which of the following is the MOST LIKELY outcome?

Options :

A : The owner will gain more operational control.

B : The owner will be able to diversify his personal portfolio.

C : The company will save on accounting costs.

D : The company will increase productivity.

Answer: B

Question 4

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?

Options :

A : $181

B : $199

C : $201

D : $206

Answer: C

Question 5

All of the following are reasons to use a confirmed irrevocable letter of credit EXCEPT concern about:

Options :

A : the buyer-s ability to pay.

B : the ability to receive cross-border payments.

C : foreign currency exposure.

D : the stability of the buyer-s bank.

Answer: C

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