Question 1

Of the following practices, which one is NOT accepted in insurance and annuity sales?

Options :

A : Reviewing insurance company ratings

B : Monitoring customer complaints against insurance companies

C : Verifying that personnel are properly licensed

D : Churning accounts

Answer: D

Question 2

Your bank’s president comes back from an industry conference and tells the compliance officer that

she attended a presentation about OFAC. She heard the bank could be fined for not adhering to OFAC

requirements. Thus, she has directed that every bank transaction be reviewed for OFAC compliance.

What is the most appropriate statement the compliance officer could make to the bank president?

Options :

A : The bank is already in compliance because OFAC checks are performed on all new depositors

B : The bank has assessed its OFAC risk and has implemented risk-based OFAC procedures

C : OFAC does not apply because the bank does not conduct business in foreign countries or with foreign nationals

D : Banks are usually not fined for OFAC violations unless they conduct transactions with SDNs or blocked countries

Answer: B

Question 3

First National Bank is a wholly owned subsidiary of Bank Holding Company, Inc.Which of the following companies is NOT an affiliate of First National Bank?

Options :

A : A company that owns 60 percent of Bank Holding Company, Inc.

B : A company of which First National owns 100 percent of the stock, set up solely to hold the title to the First National Bank building

C : A company established to sell securities and that is 100 percent owned by Bank Holding Company, Inc.

D : Another bank that is owned by Bank Holding Company, Inc.

Answer: B

Question 4

A compliance professional’s responsibilities include all of the following EXCEPT:

Options :

A : Understanding the business units operating environment and risk tolerance

B : Performing risk assessments with the assistance of business units to determine current risk levels and risks associated with the bank’s products, lines of business, customers, and locations, among other factors

C : Working with business units to ensure prompt corrective action for any detected errors

D : Assisting business lines with compliance training for employees, as needed

Answer: D

Question 5

First National Bank is attempting to determine which of the following customers would qualify as

exempt persons:

• Nationwide Foods, Inc , is a national company with stock listed on the New York Stock Exchange

• National Paper Products, is a wholly owned subsidiary of Nationwide Foods, Inc

• Products Incorporated, a depositor for three months, is a regional company whose stock is

designated a NASDAQ Capital Markets Company and that sells and leases large boats

• Century Enterprises, a local company owning several local restaurants, is a longtime bank customer

and frequently makes deposits in excess of $10,000. All of Century’s stock is owned by a local family.

Which of these customers would qualify as an exempt person?

Options :

A :

All except for Nationwide Foods, Inc

B : All except for National Paper Products

C : All except for Century Enterprises

D : All except for Products Incorporated

Answer: D

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