CAMS7 Practice Test

CAMS7 Practice Test practice questions, page 7 of 11, with answer review and explanations.

Question 31

There are three types of factors that can be used to authenticate someone ownership, knowledge, and inherent factors. Which of the following factors falls under inherent factors?

  1. Challenge-response
  2. Fingerprint
  3. Security token
  4. Passphrase

Question 32

Which of the following are common indicators of possible money laundering within the securities industry? (Choose two.)

  1. Using brokerage accounts like deposit accounts
  2. Receiving securities into an existing brokerage account following the death of a spouse
  3. Allowing fixed income securities to mature
  4. Engaging in transactions involving nominees or third parties

Question 33

Which of the following are key financial crime risks associated with real estate companies? (Choose four.)

  1. Buying property allows for the movement of large amounts of funds in a single transaction
  2. Criminal networks could purchase real estate for use as supply houses or locations to grow, manufacture, or distribute illicit narcotics
  3. Markets can be volatile, and buyers may not achieve a strong return on their investment
  4. Beneficial ownership information might be opaque, and criminals may abuse arrangements like shell companies and trusts
  5. Real estate transactions often involve financial institutions and other professional gatekeepers
  6. The high value of properties may require multiple types of financing, which can make it more difficult to identify the source of funds

Question 34

Which payment type presents the highest financial crime risk?

  1. A check returning a mortgage overpayment made in error
  2. A payment made to a mixer platform
  3. A regular standing order to a high-interest savings account
  4. A bill payment made to a friend after splitting a dinner bill

Question 35

A large international bank is conducting a comprehensive review of its risk management framework to ensure it effectively addresses various financial crime risks, including AML, CFT, sanctions, fraud, anti-bribery and corruption (ABC), and tax evasion. The bank’s compliance team is responsible for evaluating the current risk assessment processes, identifying potential gaps, and recommending enhancements to better mitigate these risks. During this review, the team needs to consider the different types of risk assessments and how to integrate findings into the overall risk management strategy. Which approach should the compliance team prioritize to enhance the bank’s ability to identify, assess, and mitigate the identified risks?

  1. Use a static risk assessment model that remains unchanged until a significant regulatory update occurs to ensure consistency in the evaluation process over time
  2. Delegate the risk assessment process to individual business units to conduct independently and allow for specialized assessments tailored to each unit's specific activities
  3. Conduct a periodic enterprise-wide risk assessment that includes identifying inherent risks, evaluating the effectiveness of existing controls, and determining residual risks
  4. Focus primarily on AML risk assessments, as these are typically the most scrutinized by regulators, while addressing other financial crime risks only when issues are identified