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CQIB Flashcards

1
Q

What are the 4 types of Financial Markets?

a) Primary market, secondary markets, equities markets and commodities markets

b) Primary market, secondary markets, exchange traded markets and over the counter markets

c) Interest rate market, foreign exchange market, equities market, derivative market

d) Exchange traded markets, over the counter market, equities market, commodities

A

Primary market, secondary markets, exchange traded markets and over the counter markets

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2
Q

What Economic Key Indicator is an indicator of Consumption?

a) Balance of payments

b) Consumer price index

c) Net foreign debt

d) Retail sales

A

Retail Sales

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3
Q

Macroeconomics focuses on:

a) Taxes, Exports and Imports, GDP, supply and demand

b) Inflation, Cash Rate, Government Regulation, Taxes

c) Climate control, supply and demand, equality, GDP

d) Unemployment, GDP, Inflation, Exports and Imports

A

Unemployment, GDP, Inflation, Exports and Imports

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4
Q

The RBA uses which policy to influence the economic environment?
A. Area Policy
B. Fiscal Policy
C. Revenue Policy
D. Monetary Policy

A

Monetary Policy

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5
Q

Liquidity Coverage Ratio (LCR) requires Australian ADIs to hold sufficient liquid assets to meet what period of net cash outflows, as projected under an APRA-prescribed stress scenario:
A. 365 days
B. 10 days
C. 30 days
D. 60 days

A

30 days

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6
Q

When did the Government adopt a ‘four pillars policy’?

A

1990

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7
Q

What is Liquidity Risk?

A

The potential inability of a bank to meet its payment obligations in a timely and cost-effective manner and/or
Determined by the Bank’s ability to meet all its anticipated expenses, including making payments on debt using only liquid assets

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8
Q

The process of pooling funds from savers and using this to provide loans to customers is called:

A

Financial intermediation

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9
Q

The Better Banking reform package, which includes initiatives such as resolving disputes and protecting whistleblowers, was created in which year?

A

2017

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10
Q

Which one of the following is not a method of facilitating payments?
a) Negotiable Instruments

b) Periodic Payments

c) Periodic Collections

d) Private placements

A

Private Placements

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11
Q

A bank’s balance sheet comprises of the following liabilities ( 3 to choose)
a) Share capital
b) Home Loans
c) Debt Issues
d) Deposits

A

Share capital, Debt Issues and Deposits

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12
Q

What are the two main sources of bank funding?
a) Retail deposits
b) Offshore Funding
c) Wholesale Funding
d) Deposit Accounts.

A

Retail Deposits and Wholesale Funding

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13
Q

Net Stable Funding Ratio requires Australian ADIs to fund their assets with sufficient stable funding to reduce funding risk over what time period?

A

One year horizon as prescribed by APRA

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14
Q

Which of the following are different types of commercial banks that operate in Australia?
A. Community banks, Credit Unions, Foreign Owned Retail Banks
B. Community banks. regional banks,
C. Investment Banks, Retails banks,
D. Regional Banks, Private banks

A

Community banks, Credit Unions, Foreign Owned Retail Banks

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15
Q

Sandy and John make an appointment with their banker to apply for a home loan at XYZ bank. Daniel goes to the same bank to organize a term deposit. Ruth is planning to set up a savings account with the same bank. Who are XYZ bank’s creditors

A

Daniel and Ruth

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16
Q

Which of the following clearing and settlement systems provides settlement services for the OTC debt market and for derivatives traded on the ASX and ASX 24 markets?

A

Austraclear

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17
Q

Which of the following sought to improve executive accountability in ADI’s?

A

BEAR

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18
Q

Basel II Accord, established in 2007, addressed which of the following risks?

a) Credit Risk
b) Market Risk
c) Operational Risk
d) Liquidity Risk

A

(a), (b) and (c)

Being: Credit Risk, Market Risk & Operational Risk

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19
Q

Which of the following is NOT a principle of responsible banking put forward by UNEP?

A. Alignment
B. Impact and Target Setting
C. Corporate and Social Responsibility
D. Governance and Culture

A

Corporate Social Responsibility

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20
Q

Which of the following regulatory bodies is considered the “lender of last resort”?

A

Reserve Bank of Australia

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21
Q

What are the three stages of the money laundering cycle?
A. Introduction, Layering, Investigation
B. Placement, Layering, Integration
C. Introduction, Layering, Investigation
D. Placement, Folding, Integration

A

Placement, Layering, Integration

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22
Q

What is NOT a characteristic of a Company?
A. Separate Legal Entity
B. Must Be Registered with ASIC
C. Business Operations are controlled
D. Business losses can be offset against personal income

A

Business losses can be offset against personal income

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23
Q

Which of the following would be considered ‘wholesale’ clients?

a) An individual with gross income of $ 200,000
b) The product being invest in or advised on has a value of $ 800,000
c) A listed entity and its related body corporates
d) A business that has 120 employees

A

(b), (c) and (d)

The product being invest in or advised on has a value of $800,000, A listed entity and its related body corporate, A business that has 120 employees

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24
Q

The Council of Financial Regulators (CFR) is the co-ordinating body for Australia’s main financial regulatory agencies and aims to:

a) Enforce a range of legislative provisions primarily under the Corporations Act, 2001
b) Enforce a range of legislative provisions aimed to promote the overall stability of the financial system
c) Advise government on the adequacy of Australia’s financial regulatory arrangements
d) Facilitate sharing of information amongst members

A

(c) and (d)

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25
Q

Which Australian regulator would prohibit any mergers or acquisitions between two large banks?

A

ACCC

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26
Q

Which of the following is NOT one of the 4 pillars of fiduciary duty?
A. Principles
B. Planning
C. Process
D. Prudence

A

Planning

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27
Q

There are six key elements to a valid contract. Which of the following are elements of a valid contract?

a) Offer and acceptance
b) Transfer of funds
c) Legal capacity of the parties to act
d) An intention between the two parties to create binding relations

A

(a), (c) and (d)

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28
Q

_______ has licenced NAB to provide financial services and act as a consumer credit provider.

A

ASIC

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29
Q

Which of the following is a main role of the RBA?

A

Monetary policy

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30
Q

Which of the following is not considered to be sensitive information under the Australian Privacy Principles?

A

Marital status

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31
Q

The Five Step Process for ethical dilemmas consists of:

a. 1. Recognise and define 2. Potential actions 3. Discuss with others 4. Identification 5. Review

b. 1. Refer and outline 2. Potential actions 3. Communicate to decision maker 4. Implementation 5. Start back at step one

c. 1. Recognise and define 2. Potential actions 3. Discuss with others 4. Implementation 5. Review

d. 1. Recognise 2. Potential actions 3. Discuss with others 4. Identification 5. Review

A

c. 1. Recognise and define 2. Potential actions 3. Discuss with others 4. Implementation 5. Review

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32
Q

In the five-step dilemma process, explaining your decision and the decision making process, is contained in which step?

A. Step 2 - Potential Actions
B. Step 3 - Discuss with Others
C. Step 4 - Implementation
D. Step 5 - Review

A

B. Step 3 - Discuss with Others

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33
Q

Elliot working in the lending team at NAB. A client has come into the bank and is threatening to take Elliot to court if he doesn’t approve his home loan before the end of the client’s settlement period. What is the chief threat to Elliot acting professionally in this matter?

A. Familiarity
B. Self Interest
C. Self-Review
D. Intimidation

A

D. Intimidation

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34
Q

When we think about influences on decision-making, what is framing?

A

To remove the ‘noise’ from an issue to allow us to see the problem for what it is

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35
Q

What are the foundation of the Carroll’s Social Responsibility Pyramid?

A. Ethical Responsibilities
B. Legal Responsibilities
C. Philanthropic Responsibilities
D. Economic Responsibilities

A

D. Economic Responsibilities

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36
Q

The Better Banking reform package, which includes initiatives such as resolving disputes and protecting whistleblowers, was created in which year?

A. 2013
B. 2017
C: 2000
D: 1995

A

B. 2017

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37
Q

What is the “four pillars policy”?

A

To avoid any merger of the big 4 banks in order to avoid further concentration or bank suppliers

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38
Q

Which on of these is not a liability?

A. Savings Deposits
B. Debt issues
C. Share Capital
D: Transaction deposits

A

C. Share Capital

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39
Q

What is maturity transformation?

A. The ability to generate earning compared to expenses
B. When the bank offers short term liabilities and turns them into longer term assets
C. Meeting long term financial obligations
D. Ability to meet all anticipated expenses

A

B. When the bank offers short term liabilities and turns them into longer term assets

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40
Q

How do Credit Unions differ from Banks?

A. Owned by and for the members
B. A limit on a proportion of funds that can be raised from the wholesale money market
C. Look to return a proportion of profit to shareholders by dividends

A

A. Owned by and for the members &
B. A limit on a proportion of funds that can be raised from the wholesale money market

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41
Q

The Reserve Bank of Australia (RBA) became the Australian central bank and banknote issuing authority in:

A. June 1960
B. January 1980
C. January 1960
D. June 1988

A

C. January 1960

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42
Q

What is not a macroeconomic key economic indicator?
A. Unemployment rates
B. Gross Domestic Product (GDP)
C. Taxes and Regulation
D. Inflation

A

C. Taxes and Regulation

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43
Q

The government uses which policy to control the economic environment?

A

Fiscal

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44
Q

What does ‘thinking about thinking’ imply?
A. Deontology
B. Metacognition
C. Relativism
D. Consequentialism

A

B. Metacongnition

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45
Q

What is a characteristic of Moral Absolutism?

A. Different cultures have different moral views
B. When in Rome, do as the Romans
C. There are universal rules that apply to everyone
D. What is good depends on what a particular group of people approve of

A

C. There are universal rules that apply to everyone

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46
Q

Self-Review can be a threat to professionalism when:

A. You will promote a customers position to the extent your objectivity is compromised
B. You are involved in auditing or evaluating the work of others
c. A financial or other interest inappropriately influences your judgement or behaviour
D. You are deterred from acting appropriately due to pressures, including attempts by another to

A

B. You are involved in auditing or evaluating the work of others

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47
Q

Which of the following would be considered a benefit of virtue ethics?

A. Weighing up the positive and negative consequences of an action means you get the best outcome
B. Maximising happiness is always the right course of action
C. It allows flexibility as there are no rules to apply
D. It provides certainty that if an action is right is should always be done

A

C. It allows flexibility as there are no rules to apply

48
Q

In 2017, the Government bought forward a comprehensive package of reforms to strengthen accountability and competition in the banking system. This is referred to as:

A. Banking Executive Accountability Regime
B. AFSL Obligations under the Corporation Act
C. Hayne Royal Commission into Misconduct in the Banking Industry
D. Reserve Bank Act

A

A. Banking Executive Accountability Regime

49
Q

What is a key concept of Consequentialism?

A. You consider no costs and no benefits before making a decision
B. The right decision is the one that achieves the best outcome (or benefit) with the least amount of harm (or cost)
C. A way of not working through the consequence of a decision
D. Tends to disregard everybody’s happiness

A

B. The right decision is the one that achieves the best outcome (or benefit) with the least amount of harm (or cost)

50
Q

Samuel explains that they XYZ savings booster account has a bonus interest rate and is a good choice for customer who want a higher return on their account and do not need to access their funds. What type of advice is Samuel offering?

A. Factual Information
B. General Advice
C. Personal Advice
d. Product Recommendation

A

B. General Advice

51
Q

Under RG271 the maximum timeframe for Standard Complaint must be:
A. No later than 45 calendar days
B. No later than 21 calendar days
C. No later than 30 calendar days
D. No later than 90 days after receiving the complaint

A

C. 30 days

52
Q

Which would be considered factual advice only?

a) Providing a customer an insurance quote
b) Providing a customer with an estimate of how much insurance is appropriate
c) Recommending an account that will generate a higher interest return because of regular deposits that has been discussed with the customer
d) You recommend a product based on account activity

A

A. Providing a customer an insurance quote

53
Q

Which of the following would not be considered a vulnerable client?
A. Poor Credit History
B. Mental Health Problems
C. Elderly Customer
D. Lack of English Skills

A

A. Poor Credit History

(Can refer to BCOP)

54
Q

Which of the following is not a step in the standard complaints handling process?

a) Empathise with the customer

b) Make reasonable enquiries about the customer’s financial situation

c) Work to a solution

d) Verify that the customer is happy with the outcome

A

B. Make reasonable enquiries about the customer’s financial situation

55
Q

What is the maximum timeframe to respond to credit-related complaints involving default notices?

a) 21 days

b) 30 days

c) 45 days

d) 90 days

A

A. 21 days

56
Q

Which of the following statements define compound issues if we have a vulnerable customer?

a) A customer is already in a permanent vulnerable position could find their position further complicated by a short- or medium-term issue that would represent a much larger risk

b) Part of a recurring situation, but not constant, such as recurring but irregular physical condition, depression, or providing care to a dependent

c) The issue is permanent and will not change, such as a permanent medical condition like impaired mobility, blindness, or dementia

d) Where the issue is not permanent but will cause short-term challenges, such as unemployment, short term illness or bereavement

A

a) A customer is already in a permanent vulnerable position could find their position further complicated by a short- or medium-term issue that would represent a much larger risk

57
Q

Which stage of the customer life cycle would typically have the most debt?

a) Youth

b) Independent

c) Family

d) Empty nesters

A

C. Family

58
Q

Which of the following is the EDR scheme that deals with complaints from consumers and small businesses about financial services and products?

a) The Credit and Investments Ombudsman (CIO)

b) The Australian Financial Complaints Authority (AFCA)

c) The Financial Ombudsman Service (FOS)

d) Superannuation Complaints Tribunal (SCT)

A

b) The Australian Financial Complaints Authority (AFCA)

59
Q

Which document/s must be provided prior to providing General Advice?

a) FSG, General Advice Warning, and All Feedback is Good Feedback

b) Product Disclosure Statement

c) FSG and Product Disclosure Statement and General Advice Warning

d) Banking Code of Practice, FSG and Product Disclosure Statement

A

C. FSG and Product Disclosure Statement and General Advice Warning

60
Q

Which is true about vulnerable customers?

a) It may not be immediately obvious a customer is in a vulnerable situation.

b) A customer needs to tell you they are vulnerable.

c) If you are unsure, you should confirm if a customer is vulnerable on NABs source systems.

d) Mental health is one of the two characteristics of vulnerability according to ASIC.

A

A) It may not be immediately obvious a customer is in a vulnerable situation.

61
Q

When looking at the ‘Customer Lifecycle’ what is true when it comes to ‘Independents’?

a) Likely to be earning an income but have no dependants

b) Additional income may go towards entertainment or holidays

c) They are tech savvy

d) They are becoming less loyal

A

a) Likely to be earning an income but have no dependants

62
Q

General advice can be provided:

a) Verbally only

b) Only in written form, including electronic communication

c) Verbally or in written form, including electronic communication

d) In written form, including emails and brochures, but no through social media

A

c) Verbally or in written form, including electronic communication

63
Q

Sarah is asked by a customer “I am 25 and looking for a low interest rate and great rewards. What credit card would you recommend?” Sarah states “We offer two credit card products that suit your life stage, and both have a strong rewards program. I recommend you look at both of these products and apply them to your situation.” Sarah is providing which of the following?

a) Factual information

b) General financial advice

c) Personal financial advice

d) Product recommendation

A

b) General financial advice

63
Q

Which is not a type of issue a vulnerable customer may experience?

a) Temporary Issues

b) Sporadic Issues

c) Simple issues

d) Compound issues

A

c) Simple issues

64
Q

The Better Banking reform package, which includes initiatives such as resolving disputes and protecting whistleblowers, was created in which year?
A. 2013
B. 2017
C. 2000
D. 1995

A

B. 2017

65
Q

What is the “Four Pillars” Policy?

A. To maintain 4 main banks in Australia and not allow a fifth bank to compete in size

B. To prevent the big 4 banks from collaborating on interest rates

C. To avoid any merger of the big 4 banks in order to avoid further concentration of bank suppliers

D. Introducing regulation of borrowing guidelines for all banks

A

C. To avoid any merger of the big 4 banks in order to avoid further concentration of bank suppliers

66
Q

Which of these is not a liability?

A. Savings Deposits

B. Debt Issues

C. Share Capital

D. Transaction deposits

A

C. Share Capital

67
Q

How do Credit Unions differ from Banks?

A. Owned by and for the members

B. A limit on a proportion of funds that can be raised from wholesale money market

C. Look to return a proportion of profit to shareholders by dividends

D. (a) and (b)

A

D. (a) and (b)

68
Q

What is maturity transformation?

A. The ability to generate earnings compared to expenses

B. When a bank offers short term liabilities and turns them into longer term assets

C. Meeting long term financial obligations

D. Ability to meet all anticipated expenses

A

B. When a bank offers short term liabilities and turns them into longer term assets

69
Q

What are the 4 types of Financial Markets?

A. Primary market, secondary market, equities market, commodities market

B. Primary market, secondary markets, exchange traded markets and over the counter markets

C. Interest rate market, foreign exchange market, equities markets derivative market

D. Exchange traded markets, over the counter markets, equities market, commodities

A

B. Primary market, secondary markets, exchange traded markets and over the counter markets

70
Q

Which of the following is not a method of facilitating payments?

A. Negotiable instruments

B. Periodic instruments

C. Periodic collections

D. Private placements

A

D. Private placements

71
Q

What economic key indicator is an indicator of Consumption?

A. Balance of payments

B. Consumer Price Index (CPI)

C. Net Foreign Debt

D. Retail Sales

A

D. Retail Sales

72
Q

The Commodities market trades in:
A. Currency
B. Corporate bonds
C Derivatives
D. Wheat

A

D. Wheat

73
Q

Which of the following indicators would not be considered “macro economic”?
A. Unemployment rate
B. GDP
C. Taxes
D. Exports

A

C. Taxes

74
Q

How does an overdraft facility generate profit for a bank?
A. Interest charged on the overdrawn balance
B. Monthly premiums to cover risk of an overdraft
C. Advisory services on cash flow
D. Fees charges on the total account balance

A

A. Interest charged on the overdrawn balance

75
Q

Which of the following functions of an investment bank do not exist for the chief purpose of generating profit?
A. Writing a disclosure document in an Initial Public Offering
B. Building a Chinese Wall when managing conflicts of interest
C. Creating underwriting spread when underwriting a deal
D. Valuing a targeted company for a merger and acquisition

A

B. Building a Chinese Wall when managing conflicts of interest

76
Q

Which of the following is not an example of a bank deposit?
A. Promissory note
B. Debit Card
C. Bill of exchange
D. Mortgage-backed security

A

D. Mortgage-backed security

77
Q

In the process of financial intermediation, which of the following entities is the go-between who facilitates the transfer of funds between those who have extra money, and those looking to borrow money
A. The debtor
B. The regulator
C. The creditor
D. The Bank

A

D. The Bank

78
Q

The Australian government announces a taxation increase to lift revenues to reduce Australia’s financial deficit. This decision is an example of?:
A. Monetary Policy
B. Domestic payments policy
C. Balance of payments policy
D. Fiscal Policy

A

D. Fiscal Policy

79
Q

XYZ Bank borrows and lends only to large corporate clients, public agencies, government and other large financial institutions. What is XYZ’s chief banking activity?
A. Business banking
B. Wholesale banking
C. Community banking
D. Retail banking

A

B. Wholesale banking

80
Q

Dale deposits $10,000 and earns 2% interest per annum. The bank then pools Dale’s deposit with other funds and uses it for loans and investments. The bank lends Stephen $150,000 at an interest rate of 5% per annum. What is the role of the bank in this transaction?
A. It sets the underlying inflation rate which impacts the interest rate
B. It is both the creditor and debtor for Dale
C. It generates its primary income from the fees paid to both parties
D. It is the financial intermediary

A

D. It is the financial intermediary

81
Q

The process of pooling funds from savers and using this to provide loans to customers is called:
A. Private placements
B. Financial Intermediation
C. Debt Capital intermediation
D. Spread

A

B. Financial Intermediation

82
Q

Which of the following statements are ADVANTAGES of transactions accounts?
A. Customers can easily access the money held in the account
B. There is potential to earn interest on the money held in the account
C. There is a low rate of return compared to other types of bank accounts
D. They are a safe place to keep money compared to other financial instruments

A

A, B & D

83
Q

AmazingPay is a company that processes payments on behalf of vendors and generates revenue from charging the fees for this service.

AmazingPay is an example of which of the following:

A. Electronic purse
B. Online Banking
C. Payment Intermediary
D. Contactless payment

A

C. Payment Intermediary

84
Q

How do credit cards generate revenue for credit card issuers?
A. Commission paid by the retailers who accept the card as a payment facility
B. Interest charged to the retailers to use the funds provided by cardholders
C. Interest charged to the cardholders who do not pay their balance in full by the due date
D. Promotion to cardholders on other facilities such as electronic purses and digital wallets

A

A & C

85
Q

Even though insurance companies take on risk, they are still able to be profitable for which of the following reasons?

A. They calculate the risk and probability of the event happening
B. They set a premium that is reflective of the risk being covered
C. They can defer their risk liability to the regulator
D. They receive revenue from investing premiums.

A

A, B & D

86
Q

Under the Insurance Contracts Act 1984 insurance companies are required to:

A. always act in good faith
B. require medical examinations for all persons applying for a life insurance
C. not vary insurance contracts to the detriment of policy holders prior to the contract being renewed
D. give reasons in writing to the customer for certain events, including where an insurance application is denied

A

A, C & D

87
Q

Which of the following defines an indemnity and general insurance policy?

A. The sum insurance reflects the replacement value of the asset
B. The sum insured ensures the policy owner is compensated for the loss suffered and factors present in a percentage of profit to cover inconveniences
C. The sum insured varies based on the type of general insurance policy and the event being insured
D. The sum insured aims to place the insured in the same position as immediately before the insured event

A

D. The sum insured aims to place the insured in the same position as immediately before the insured event

88
Q

Coffee Shop Pty Ltd takes out an insurance policy to protect against the loss of revenue from damage to their business premises where they would be unable to operate for a period of time.

What type of insurance does Coffee Shop Pty Ltd require?

a. Public liability

b. Product liability

c. General property

d. Business interruption

A

d. Business interruption

89
Q

Under a “principle and interest” mortgage, the interest component makes up a larger component of the repayment than the principle component:

a) at the start of the loan.

b) at the end of the loan.

c) early, but reverses over time as the debt reduces.

d) over the life of the loan, as the principle is paid down slowly.

A

A & C

90
Q

A deeming account is designed for:

a. sole trader customers

b. low income customers

c. primary producer customers

d. retired customers aged over 55

A

d. retired customers aged over 55

91
Q

Anne is 68 and owns her home. She wants to set up a line of credit by accessing a small amount of equity in her home as security.

What loan product is best suited to Anne’s needs?

a. Line of credit loan

b. Reverse mortgage

c. Equity release loan

d. Residential mortgage

A

b. Reverse mortgage

92
Q

The ABC Account offers immediate access to funds, little to no interest, and a wide variety of payment services.

What type of account is ABC?

a. Term deposit

b. Savings account

c. Deeming account

d. Transaction account

A

d. Transaction account

93
Q

Celeste is 36 and living on a strict budget while she saves for a home deposit. She wants to save as much as possible, earn solid interest, but still have access to her funds in the case of an emergency.

What type of deposit account would BEST suit her needs?

a. Term deposit

b. Savings account

c. Student account

d. Transaction account

A

b. Savings account

94
Q

Fees levied on deposit and savings accounts are a key factor to consider and may include:
a) Monthly account keeping fees
b) Internet banking fees
c) Overdrawn fees
d) LMI

(a), (c)

(a), (b), (d)

(a)

(a), (b), (c)

A

(a), (b), (c)

95
Q

Withdrawal of funds from a term deposit account prior to maturity will generally incur:

a. A breakage fee and a reduction in the original principle invested

b. Penalties and a reduction in the overall interest payable

c. A default on a credit report

d. A reduction in the original principle invested

A

b. Penalties and a reduction in the overall interest payable

96
Q

While APRA sets prudential standards for the insurance industry and issues prudential practice standards, the role of ASIC in the insurance industry is to:

a. Have insurance businesses comply with regulations to ASIC

b. To have responsibility for licensing financial services providers, including those who offer insurance and provide advice on these products.

c. Oversee financial service providers obtaining approval to carry on an insurance business.

d. Have insurance businesses report regulatory breaches to ASIC

A

b. To have responsibility for licensing financial services providers, including those who offer insurance and provide advice on these products.

97
Q

How is a risk score calculated?

a) Combination of probability/likelihood and consequence/impact

b) Combination of risk grade and probability/likelihood

c) Divide consequence/impact by probability/likelihood

d) Divide risk score by number of risk events

A

a) Combination of probability/likelihood and consequence/impact

98
Q

Which of the following is a risk identification technique?

a) Loss data capture and analysis

b) Near miss analysis and experience

c) Communication and consultation

d) (a) and (b)

A

d) (a) and (b)

99
Q

Which of the following is NOT a risk mitigation option:

a) Accept

b) Change

c) Transfer

d) Review

A

d) Review

100
Q

This is an example of what type of Risk. May arise because of inappropriate unethical or unlawful behaviour on part of bank employees.

a) Operational Risk

b) Compliance Risk

c) Conduct Risk

d) Credit Risk

A

c) Conduct Risk

101
Q

Which of the following is NOT an advantage of credit scoring

a) Efficiencies in processing large volumes of applications

b) Reduction in operating costs

c) Dehumanisation of the lending process

d) Ability to process large volumes of information in a consistent manner

A

c) Dehumanisation of the lending process

102
Q

Which of the following is not one of the Council of Financial Regulators?

a) APRA

b) ASIC

c) ACCC

d) RBA

A

c) ACCC

103
Q

In regard to the Three Lines of Defence model, which of the following is included in the second line of defence (Risk and Control Functions)?

a) Review and challenge risk management process

b) Objective assessment and offer assurance

c) Provide guidance and direction

d) (a) and (c)

A

d) (a) and (c)

104
Q

What are the three risk assessment steps and the correct order of them? (ISO 31000:2009)

A

Risk Identification, Risk Analysis, Risk Evaluation

105
Q

What is a Risk Register?

A

Consistency, Completeness of Information, Control, Communication, Compliance

106
Q

What is the purpose of a risk matrix?

a. Determine the risk mitigation techniques for a classified risk
b. Classify a risk based on the likelihood of it occurring and its consequence
c. Examine each classified risk in terms of its consequence and the selected risk treatment technique
d. Allocate a numeral rating of risk based on the consequences of the risk and its impact on the business

A

b. Classify a risk based on the likelihood of it occurring and its consequence

107
Q

Which of the following best describes speculative risk?
a. The risk a loan will not be repaid by a customer
b. The risk that employees will engage in illegal trading on speculative investments
c. The risk that the bank cannot meet future repayments if risky investment do not perform
d. The risk that there will be a loss or gain solely on a decision to accept of decline a risk

A

d. The risk that there will be a loss or gain solely on a decision to accept of decline a risk

108
Q

The Council of Financial Regulators (CFR)
a. is a member of body with no regulatory power of it’s own
b. has final government power over risk and risk management
c. consists of APRA, ASIC, the RBA and Department of Treasury
d. has the primary role of advising banks on risk management policies

A

b. has final government power over risk and risk management
c. consists of APRA, ASIC, the RBA and Department of Treasury

109
Q

ASIC issues the investment arm of XYZ Bank with an infringement notice. What type of risk does this represent to XYZ Bank?
a. Market Risk
B. Liquidity Risk
C. Compliance Risk
D. Operational Risk

A

C. Compliance Risk

110
Q

Which statement is true in respect of financial intermediation?
a. Financial intermediation is relatively unprofitable
b. Financial intermediation has no positive impact on the utilisation of finds within the economy as a whole
c. In relation to savers, the bank’s only responsibility is to provide safe custody for deposits
d. Customers who borrow are the bank’s debtors

A

d. Customers who borrow are the bank’s debtors

111
Q

Which one of the following is not considered one of the three common approaches to ethical issues?
a. Morals
b. Deontology
c. Virtue
d. Consequentialism

A

a. Morals

112
Q

Which statement is correct regarding moral absolutism?
a. It is a form of deontology and there is no universal set of moral principals
b. It is a form of deontology and there are certain universal moral principals by which all people’s actions may be judged
c. There is no universal set of moral principals and aligns to the moral values within culture
d. It aligns to the moral values within culture and it is a form of deontology

A

b. It is a form of deontology and there are certain universal moral principals by which all people’s actions may be judged

113
Q

When faced with a moral dilemma, you should choose the action that maximises good outcome
a. Virtue Theory
b. Consequentialism
c. Deontology
d. Moralistic ethics

A

b. Consequentialism

114
Q

A professional will promote a client’s or employer’s position to the point that the professional’s objectivity is compromised. Which threat to professionalism is this statement describing?
a. Advocacy
b. Intimidation
c. Self Interest
d. Self Review

A

a. Advocacy

115
Q

ISO 26000 is an international std covering social responsibility. Which one of the following is not considered a core subject?
a. Shareholder returns
b. Organisational governance
c. Consumer issues
d. Human rights

A

a. Shareholder returns

CQIB (2 decks)

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