CAMS Practice Test

CAMS Practice Test practice questions, page 25 of 26, with answer review and explanations.

Question 121

A client who owns a swimming pool company requests to open 19 accounts at a bank, each with a debit card for its swimming pool technicians. When asked about the purpose of each account, the client explains that each technician needs a separate checking account to purchase pool chemicals. Which available source could be used in the bank's internal investigation on this client's activities?

  1. Client's credit bureau report
  2. Local law enforcement investigation report
  3. Interview swimming pool technicians and chemical suppliers
  4. Internet search showing how such business are typically operated

Question 122

A bank sells reloadable open-loop prepaid cards to both customers and non-customers. What is a red flag associated with these cards that may indicate money laundering?

  1. A bank customer historically purchases several prepaid cards near year-end.
  2. A non-bank customer regularly loads large amounts of cash onto several prepaid cards.
  3. A non-bank customer consistently uses the bank to obtain cash advances using a prepaid card.
  4. A bank customer routinely purchases five prepaid cards in small even-dollar amounts on a monthly basis.

Question 123

Which product is considered to be of highest money laundering risk?

  1. Credit cards
  2. Savings accounts
  3. Time deposit accounts
  4. International wire transfers

Question 124

A compliance officer at a large financial institution has been tasked by senior management to lead a team in an internal review and potential revision of the institution's customer onboarding program following a regulatory enforcement action of another institution. Which step should the compliance officer perform first?

  1. Reviewing the institution's risk assessment
  2. Revising training materials for frontline staff
  3. Conducting enhanced due diligence on high risk customers
  4. Resolving substantive discrepancies in customer verification

Question 125

A bank provides trade financing for a company whose primary export is steel. Which action by the company indicates possible money laundering?

  1. The company often deals with foreign currency exchanges.
  2. The company regularly understates the value of goods exported.
  3. The company frequently sells above or below its competitors' price.
  4. The company frequently transfers funds to other bank accounts located in other jurisdictions.