Question 1

______________ should include basic elements designed to understand and mitigate risk. It usually includes: Written program Compliance-related policies and procedures

Options :

A : Tactical Compliance procedure

B : Rank solution

C : Compliance program

D : None of these

Answer: C

Question 2

Transfers involving entries to accounts maintained at two different Reserve Banks are:

Options :

A : Fedwire transfers

B : Interdistrict transfers

C : Intradistrict transfers

D : Any one of these

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

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

Question 5

Which of the following is the best method for a large bank to use in monitoring its CRA performance?

Options :

A :

Review the effectiveness of marketing materials.

B : Evaluate approval and denial rates for minority loan applicants.

C : Perform a quarterly evaluation of the bank’s loans-to-deposits ratio.

D :

Perform a geographic analysis of lending levels and dispersion of loans.

Answer: D