CAMS Practice Test

CAMS Practice Test practice questions, page 24 of 26, with answer review and explanations.

Question 116

A client is a wholesale auto business that operates as a used car lot. The client regularly ships vehicles internationally. In a four-month period, the client received wires totaling $1,250,000 from a dealer in Benin in West Africa. All wires originated from Benin and were in increments of $50,000. Account debits made to the account were payable to various transport companies. All incoming checks reference various vehicles purchased. Dock shipping receipts produced by the client to support account activity identify the vehicles but cannot easily be tied to the wires received. What is the suspicious behavior?

  1. The dock shipping receipts match the vehicles
  2. Vehicles are regularly shipped internationally
  3. Wires received are in large, even dollar amounts
  4. Account debits are payable to transport companies

Question 117

A high-volume dealer of precious metals and stones in a high-risk jurisdiction is approached by a new customer interested in selling gold worth $200,000. The customer was referred by a longtime family friend of the dealer and provides no indication of background or business purpose for the sale. The dealer agrees to make the purchase based solely on the reference. What is the money laundering red flag?

  1. The customer was referred by a longtime friend of the dealer
  2. The precious metals dealer is operating in a high-risk jurisdiction
  3. A new customer is selling gold worth $200,000 to a high volume dealer
  4. The customer provides no background information or business purpose for the transaction

Question 118

What does the Financial Action Task Force 40 Recommendations address on transparency of beneficial ownership?

  1. Gatekeepers
  2. Correspondent banking
  3. Payable through accounts
  4. Legal persons and arrangements

Question 119

A compliance officer identifies a potentially significant risk in a popular financial product. Further investigation reveals there is no mitigating control. Which course of action should the compliance officer take?

  1. Launch a long-term project to remediate the control deficiency
  2. Note the risk and address it during the next round of policy and procedure review
  3. Immediately cease providing the product and only offer it after effective permanent mitigation is implemented
  4. Implement a temporary mitigation plan that enables effective management of the risk until a permanent plan can be developed

Question 120

Which factor should a bank consider before sharing information about a customer with its broker-dealer affiliate in the case of an investigation?

  1. Whether the broker-dealer affiliate can rely on the due diligence done by the bank
  2. Whether there is a mutual legal assistance treaty in place between the two institutions
  3. Whether privacy and data protection rules permit the bank to share the information with the affiliate
  4. Whether both institutions have an account or are in the process of opening an account for the customer