WorksheetsCAMS CHAPTER 3
Total questions: 60
Worksheet time: 33mins
Name
Class
Date
1.
Which of the following is a key advantage of a Risk-Based Approach (RBA) to AML/CFT?
a)
Strict "check-the-box" compliance
b)
Flexibility to adapt to varying risks
c)
Uniform procedures for all customers
d)
Eliminates all ML risks
2.
According to FATF, which factor classifies a customer as high risk?
a)
Verified residential address
b)
Non-resident status
c)
Low transaction volume
d)
Government employment
3.
Which of these is a FATF-recommended geographic risk factor?
a)
Countries with robust AML laws
b)
Sanctioned jurisdictions
c)
High corruption levels
d)
Stable democracies
4.
What is a prohibited risk category under AML/CFT?
a)
Medium-risk retail businesses
b)
Transactions with OFAC-listed entities
c)
Low-risk corporate accounts
d)
Non-profit organizations
5.
A cash-intensive business falls under which risk category?
a)
Low risk
b)
Medium risk
c)
High risk
d)
Prohibited risk
6.
Which of these is a high-risk customer type?
a)
Publicly traded corporations
b)
Casinos
c)
Virtual currency exchanges
d)
Local charities
7.
What is a core element of CDD per FATF?
a)
Skipping beneficial ownership checks
b)
Verifying customer identity
c)
Ignoring transaction monitoring
d)
Only screening PEPs
8.
When is Enhanced Due Diligence (EDD) required?
a)
For all customers
b)
Only for PEPs and high-risk jurisdictions
c)
Only for non-profits
d)
Never for corporate accounts
9.
Which activity is a red flag for structuring?
a)
Depositing $9,000 once
b)
Three $2,900 cash deposits in one day
c)
Wiring funds for a home purchase
d)
Using a debit card for groceries
10.
What is a red flag for trade-based money laundering?
a)
Accurate invoices
b)
Overpricing goods in invoices
c)
Direct payments to suppliers
d)
Transparent shipping records
11.
Which of these is a targeted sanction?
a)
Comprehensive trade embargo
b)
Asset freeze on a named terrorist
c)
Sectoral ban on oil exports
d)
Universal travel ban
12.
What must a bank do if a customer matches the SDN list?
a)
File a SAR but continue the transaction
b)
Freeze assets and report to OFAC
c)
Request additional ID
d)
Ignore if low-risk
13.
Which virtual currency activity is suspicious?
a)
Long-term Bitcoin holdings
b)
Rapid transfers through multiple wallets
c)
Bulk prepaid card purchases with cash
d)
Using regulated exchanges
14.
Which financial pattern suggests human smuggling?
a)
Payroll checks from verified employers
b)
Multiple sub-$3,000 wires to border cities
c)
Transparent business transactions
d)
Low ATM usage
15.
What is a red flag for human trafficking?
a)
Verified employee payrolls
b)
Frequent payroll checks cashed by the employer
c)
Transparent salary deductions
d)
Low-risk business model
16.
What is the board’s role in AML compliance?
a)
Daily transaction monitoring
b)
Approving high-level AML policies
c)
Conducting CDD
d)
Filing STRs
17.
Which is critical for AML training?
a)
Covering only SAR filing
b)
Red flags and reporting procedures
c)
Ignoring senior management
d)
Real-life ML case studies
18.
What must an independent audit assess?
a)
Only low-risk accounts
b)
AML control effectiveness
c)
Compliance officer’s workload
d)
IT infrastructure
19.
A PEP uses a family member’s account. This is:
a)
Normal estate planning
b)
A red flag for illicit activity
c)
Acceptable with verbal consent
d)
Only risky for non-profits
20.
Which document is essential for PEP due diligence?
a)
Social media posts
b)
Verified source of wealth
c)
Friend testimonials
d)
Unverified cash receipts
21.
What is the primary purpose of transaction monitoring systems?
a)
To increase bank profits
b)
To identify potentially suspicious activity
c)
To reduce customer wait times
d)
To automate all banking processes
22.
Which of these would trigger a suspicious activity report?
a)
Multiple cash deposits just below reporting threshold
b)
A single large wire transfer with legitimate documentation
c)
Rapid movement of funds through multiple accounts with no business purpose
d)
Normal payroll deposits for employees
23.
The "fourth line of defense" in AML typically refers to:
a)
Frontline staff
b)
Compliance department
c)
Internal audit
d)
External regulators
24.
A correspondent banking relationship would be considered:
a)
Low risk
b)
Medium risk
c)
High risk
d)
No risk
25.
Which of these is NOT a common trade-based money laundering technique?
a)
Over-invoicing
b)
Under-invoicing
c)
Multiple invoicing
d)
Phantom shipping
26.
The three stages of money laundering are:
(a)
27.
A politically exposed person (PEP) is:
a)
Any government employee
b)
Only foreign officials
c)
Individuals entrusted with prominent public functions
d)
Only heads of state
28.
Which document is most important for CDD of a corporate client?
a)
Certificate of incorporation
b)
Marketing materials
c)
Employee handbook
d)
Office lease agreement
29.
The Wolfsberg Group is best known for:
a)
Setting global interest rates
b)
Establishing AML principles for private banking
c)
Regulating stock exchanges
d)
Overseeing cryptocurrency
30.
A shell company is primarily characterized by:
a)
Extensive physical assets
b)
No significant business operations
c)
Large workforce
d)
Publicly traded stock
31.
Which regulator issued the "Travel Rule" for crypto transactions?
a)
FATF
b)
OFAC
c)
SEC
d)
FDIC
32.
The most important element of an effective AML program is:
a)
Advanced software
b)
Strong governance and culture
c)
Low employee turnover
d)
Beautiful office space
33.
Which activity would NOT typically require a CTR?
a)
$12,000 cash deposit
b)
$9,000 cash withdrawal
c)
$15,000 check deposit
d)
$20,000 cash exchange
34.
A red flag for human trafficking might include:
a)
Regular payroll deposits
b)
Multiple employees sharing one bank account
c)
Transparent accounting records
d)
Low employee turnover
35.
The primary purpose of a risk assessment is to:
a)
Reduce all risks to zero
b)
Identify and prioritize risks
c)
Eliminate the need for controls
d)
Make compliance staff happy
36.
Which is NOT a typical characteristic of terrorist financing?
a)
Small transaction amounts
b)
Legitimate-appearing sources
c)
Long-term investment strategies
d)
Multiple intermediaries
37.
A beneficial owner is:
a)
Always the account holder
b)
The person who ultimately owns or controls the customer
c)
Only relevant for corporate accounts
d)
The bank's compliance officer
38.
Which sector is most vulnerable to trade-based money laundering?
a)
Technology
b)
Import/export businesses
c)
Healthcare
d)
Education
39.
The most effective way to detect structuring is:
a)
Reviewing individual transactions
b)
Analyzing patterns across multiple transactions
c)
Asking customers about their motives
d)
Ignoring small deposits
40.
Which is NOT a recommended method for verifying customer identity?
a)
Government-issued ID
b)
Utility bills
c)
Social media profiles
d)
Corporate registration documents
41.
Which of the following is a key advantage of a Risk-Based Approach (RBA) to AML/CFT? (Select one)
a)
Strict "check-the-box" compliance
b)
Flexibility to adapt to varying risks
c)
Uniform procedures for all customers
d)
Eliminates all ML risks
42.
According to FATF, which factor classifies a customer as high risk? (Select one)
a)
Verified residential address
b)
Non-resident status
c)
Low transaction volume
d)
Government employment
43.
Which of these is a FATF-recommended geographic risk factor? (Select two)
a)
Countries with robust AML laws
b)
Sanctioned jurisdictions
c)
High corruption levels
d)
Stable democracies
44.
What is a prohibited risk category under AML/CFT? (Select one)
a)
Medium-risk retail businesses
b)
Transactions with OFAC-listed entities
c)
Low-risk corporate accounts
d)
Non-profit organizations
45.
A cash-intensive business falls under which risk category? (Select one)
a)
Low risk
b)
Medium risk
c)
High risk
d)
Prohibited risk
46.
Which of these is a high-risk customer type? (Select two)
a)
Publicly traded corporations
b)
Casinos
c)
Virtual currency exchanges
d)
Local charities
47.
What is a core element of Customer Due Diligence (CDD) per FATF? (Select one)
a)
Skipping beneficial ownership checks
b)
Verifying customer identity
c)
Ignoring transaction monitoring
d)
Only screening PEPs
48.
When is Enhanced Due Diligence (EDD) required? (Select one)
a)
For all customers
b)
Only for PEPs and high-risk jurisdictions
c)
Only for non-profits
d)
Never for corporate accounts
49.
Which activity is a red flag for structuring? (Select one)
a)
Depositing $9,000 once
b)
Three $2,900 cash deposits in one day
c)
Wiring funds for a home purchase
d)
Using a debit card for groceries
50.
What is a red flag for trade-based money laundering? (Select one)
a)
Accurate invoices
b)
Overpricing goods in invoices
c)
Direct payments to suppliers
d)
Transparent shipping records
51.
Which of these is a targeted sanction? (Select one)
a)
Comprehensive trade embargo
b)
Asset freeze on a named terrorist
c)
Sectoral ban on oil exports
d)
Universal travel ban
52.
What must a bank do if a customer matches the SDN list? (Select one)
a)
File a SAR but continue the transaction
b)
Freeze assets and report to OFAC
c)
Request additional ID
d)
Ignore if low-risk
53.
Which virtual currency activity is suspicious? (Select two)
a)
Long-term Bitcoin holdings
b)
Rapid transfers through multiple wallets
c)
Bulk prepaid card purchases with cash
d)
Using regulated exchanges
54.
The three stages of money laundering are: (Fill in the blanks)
(a)
55.
A politically exposed person (PEP) is: (Select one)
a)
Any government employee
b)
Only foreign officials
c)
Individuals entrusted with prominent public functions
d)
Only heads of state
56.
Which document is most important for CDD of a corporate client? (Select one)
a)
Certificate of incorporation
b)
Marketing materials
c)
Employee handbook
d)
Office lease agreement
57.
The Wolfsberg Group is best known for: (Select one)
a)
Setting global interest rates
b)
Establishing AML principles for private banking
c)
Regulating stock exchanges
d)
Overseeing cryptocurrency
58.
A shell company is primarily characterized by: (Select one)
a)
Extensive physical assets
b)
No significant business operations
c)
Large workforce
d)
Publicly traded stock
59.
Which regulator issued the "Travel Rule" for crypto transactions? (Select one)
a)
FATF
b)
OFAC
c)
SEC
d)
FDIC
60.
The most important element of an effective AML program is: (Select one)
a)
Advanced software
b)
Strong governance and culture
c)
Low employee turnover
d)
Beautiful office space
100 %
