CAMS Practice Test

CAMS Practice Test practice questions, page 2 of 26, with answer review and explanations.

Question 6

A customer opens a corporate account with a broker-dealer on behalf of several beneficial owners, with a stated long-term investment goal. The customer deposits $25.5 million into the account and three days later transfers $5 million to an overseas bank. Shortly thereafter, the customer begins making numerous purchases of pesos. The compliance officer receives a query regarding the movement of funds. Within a month of account opening, the customer depletes the account. Which two red flags should prompt the firm's compliance officer to take action? (Choose two.)

  1. The new account deposit is $25.5 million
  2. A corporate account is opened on behalf of several beneficial owners
  3. The compliance officer receives the query regarding the movement of funds
  4. The customer's stated investment goal is not reflective of account activity

Question 7

What should countries do to help prevent non-profit organizations from being abused for the financing of terrorism according to the Financial Action Task Force 40 Recommendations?

  1. Allow for freezing assets of non-profit organizations
  2. Require all non-profit organizations to register with the country's financial intelligence unit
  3. Ensure non-profit organizations cannot be used to conceal or obscure the diversion of funds intended for legitimate purposes to terrorists' organizations
  4. Create laws that forbid non-profit organizations from completing cross-border transactions without first running them through known terrorist data bases

Question 8

An employee hears a colleague on the telephone with a customer giving advice on how to ensure that a suspicious transaction report will not be filed as a result of a future transaction. What action should the employee take?

  1. Report the conversation to the local police
  2. Report the conversation to the compliance officer
  3. Tell the colleague that it is against policy to give such advice
  4. Ignore the situation because the colleague is the relationship manager for that customer

Question 9

The USA PATRIOT Act requires United States (U.S.) financial institutions to collect certain information from non-U.S. banks that hold a correspondent account. Which two pieces of information must a non-U.S. bank provide to its U.S. correspondent to enable them to comply with this requirement? (Choose two.)

  1. The name and address of all shell banks the bank maintains accounts for
  2. The name and address of all beneficial owners who own 25% or more of the bank
  3. Prompt notice of any suspicious activity it detects on any customer who uses the correspondent account
  4. The name and address of a U.S. person who is authorized to receive service of legal process for the bank

Question 10

What are two legal risks of having inadequate privacy policies and procedures? (Choose two.)

  1. Diminished reputation
  2. Industry of regulatory sanctions
  3. Charges of deceptive business practices
  4. Higher marketing and public relations costs