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CQIB 2 Flashcards

1
Q

Matthew states “Everyone at work must use reusable Keep Cups. It doesn’t matter if anyone is worried these cups may spread germs. It is our duty to do the right thing to save the environment”.

This is an example of which approach to answering an ethical issue?

a. Deontology

b. Consequentialism

c. Character-based

d. Virtue

A

a. Deontology

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2
Q

Ethics is based on values. In order to respond to “What should I do?”, it is important for you to personally consider which one of the following?

a. What does society expect me to value?

b. What do I value in the way I live my life?

c. What are the values of the people around me?

d. How does this fit with my family, cultural norms, religious beliefs or traditions?

A

b. What do I value in the way I live my life?

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3
Q

If using virtue ethics to make an ethical decision, you are:

a) refusing to use people as a “means to an end”.

b) applying an absolute value approach to your actions.

c) moving towards being the best version of yourself possible.

d) required to be true to yourself when making ethical decisions and identify what it would be like if we lived up to our own standards.

a. (a) and (b)

b. (b) and (c)

c. (c) and (d)

d. (a), (c), and (d)

A

c. (c) and (d)

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4
Q

What is the decision-making process of expediency?

a. To make an easy decision, but not necessarily the best possible decision

b. To conclude that the best solution is to make no decision

c. Correctly frame the problem in order to make the right decision

d. To make a slow, deliberate decision over a fast, intuitive decision

A

a. To make an easy decision, but not necessarily the best possible decision

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5
Q

The Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry (2017-2019) was established to investigate the conduct of financial services entities. In his final report Commissioner Hayne outlined six key underlying principles to inform the conduct of the financial services industry. These six key principles include:

a. Obey the law, Act truthfully, Deliver service with reasonable care and skill

b. Provide services that are fit for purpose, Do not mislead or deceive, Act fairly.

c. Obey the law. Maintain strong profit, Provide quality service, Charge fees for service

d. When acting for another, act in the best interests of that other, be honest, be truthful

A

b. Provide services that are fit for purpose, Do not mislead or deceive, Act fairly.

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6
Q

In a team meeting regarding a recent complaint from a customer, Grayson suggests waiting until the complaint goes through an external dispute resolution body, as it may not even get that far. Grayson is using which of the following influences to ethical decision making:

a. Framing

b. Fast and Slow Thinking

c. Not Thinking

d. Do nothing

A

d. Do nothing

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7
Q

When recording all information about a particular ethical dilemma, it’s essential know the issues you are facing by looking at the facts and having a clear understanding of who the various stakeholders are.”

What step of the five-step ethical decision model is this statement referring to?

a. Step One - Recognise & Define

b. Step Two - Potential Actions

c. Step Three - Discuss with Others

d. Step Four - Implementation

A

a. Step One - Recognise & Define

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8
Q

The concept of Corporate Social Responsibility (CSR) is generally understood to mean that corporations have a degree of responsibility not only for the economic consequences of their activities, but also for the social and environmental implications. Which of the following is CSR not responsible for:

a. Conducting business in an ethical way, in the interests of the wider community.

b. A willingness to do more than just meet regulatory requirements.

c. Balancing shareholder interests against the interests of the wider community.

d. Ensuring the RBA meets it’s inflation target.

A

d. Ensuring the RBA meets it’s inflation target.

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9
Q

A profession is a disciplined group of individuals who adhere to ethical standards. Professionals are best described as someone who:

a. positions themselves as possessing special knowledge and skills in a widely recognised body of learning derived from research, education and training at a high level, and is recognised by the public as such.

b. uphold the principles, laws, ethics and conventions of a profession as a way of practice.

c. are governed by codes of ethics, and profess commitment to competence, integrity and morality, altruism, the promotion of the public good within their expert domain, are accountable to those served and to society

d. listen to their customers, act accordingly, do the right thing.

A

c. are governed by codes of ethics, and profess commitment to competence, integrity and morality, altruism, the promotion of the public good within their expert domain, are accountable to those served and to society

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10
Q

Is a machine-learning algorithm morally responsible for the decisions that it makes?

a. Yes, because the effects of its decisions are morally important

b. No, because it is not a moral agent who can distinguish between right and wrong

c. Yes, because it intentionally brought about the consequences of the decision

d. No, because its decision-making process is based on subjective historical data

A

b. No, because it is not a moral agent who can distinguish between right and wrong

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11
Q

When applying Step Two – Potential Actions of the ethical decision model you must ask yourself which of the following questions?

a) Are there any legal, regulatory or policy positions relating to this issue?

b) Is there anything I would do differently if faced with a similar situation in the future?

c) Are there precedents or similar situations that you can learn from?

d) How does your self-interest impact your decision making?

a. (b) only

b. (a) & (b)

c. (a) & (c)

d. (a), (c) & (d)

A

c. (a) & (c)

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12
Q

Sue states after getting off a call “I just feel that customer is going to lodge a complaint against me. I’m going to send an email to my manager outlining the situation”.

Sue is using which decision-making approach?

a. Intuition

b. Deontology

c. Group thinking

d. Consequentialism

A

a. Intuition

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13
Q

A bank’s ‘liquidity’ can be best described as its ability to do which of the following?

a. Manage risk and withstand losses without becoming insolvent

b. Meet all anticipated expenses using cash, or assets that can be easily converted to cash

c. Comply with long-term obligations and continue operations into the foreseeable future

d. Generate earning compared to its expenses and other relevant costs over a specific period

A

b. Meet all anticipated expenses using cash, or assets that can be easily converted to cash

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14
Q

Which of the following is traded in the commodities market?

A. Currency

B. Electricity

C. Corporate bonds

D. Forward rate agreements

A

B. Electricity

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15
Q

The Australian government announces a $2.0 billion investment in infrastructure for alternative energy. This large-scale investment will impact on banking operations and investment decisions.
The decision is an example of which of the following?

A. Fiscal Policy

B. External Policy

C. Monetary Policy

D. Regulation impact

A

A. Fiscal Policy

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16
Q

The primary purpose of Australia’s monetary policy is to

A. maintain full employment

B. Influence the spending pattern of households

C. Control Revenue sources such as borrowing funds

D. Manage inflation and preserve the value of money

A

D. Manage inflation and preserve the value of money

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17
Q

Which of the following non-authorised deposit-taking institutions would chiefly provide borrowing and lending services to government agencies and large business?

A. Finance company

B. Securitisation vehicle

C. Cash Management Trust

D. Money Market Corporation

A

D. Money Market Corporation

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18
Q

The main purpose of financial intermediation is to

A. facilitate and co-ordinate the payment of interest to savers on funds deposited

B. lend funds to borrowers and therefore take on risk of non-payment of loans

C. Store saver’s deposits for safe-keeping and ensure savers can access their funds when required

D. pool the funds deposited by savers to provide loans to borrowers or investor to generate alternative income

A

D. pool the funds deposited by savers to provide loans to borrowers or investor to generate alternative income

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19
Q

World Water Corporation issues new shares direct to the public to fund capital works
This is an example of which market?
A. Primary Market
B. Secondary Market
C. Exchange-traded market
D. Over the counter market

A

A. Primary Market

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20
Q

What is the main threat posed to a bank’s profitability arising from new technologies of bitcoin and blockchain?

A. The use of artificial intelligence in both vehicles means there is less of a role for human traders
B. Both technologies rely on the honesty and ethics of it’s users, so banks no longer have an oversight or centralised role
C. They both use peer to peer technology meaning no-third party central authority is required to process payments or reconciliations
D. The amount of customer data collected by both technologies means they will soon overtake the role of traditional banks and central authorities

A

C. They both use peer to peer technology meaning no-third party central authority is required to process payments or reconciliations

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21
Q

Which of the following would be considered a ‘macroeconomic’ indicator?
A. Barriers to entry
B. Marginal tax rates
C. Gross domestic product
D. Market concentration index

A

C. Gross domestic product

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22
Q

The liquidity coverage ratio (LCR) requires Australian ADI’s to hold sufficient liquid assets to meet
A. 30 day net cash outflows
B. 60 day net cash outflows
C. 90 day net cash outflows
D. 120 day net cash outflows

A

A. 30 day net cash outflows

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23
Q

The Reserve Bank of Australia is responsible for:

a. operating the national payments system

b. implementing the National Credit Code (NCC)

c. regulating financial advice provided to retail clients

d. ensuing that financial institutions remain financially sound

A

a. operating the national payments system

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24
Q

Which regulators are part of the Council of Financial Regulators?

a) Reserve Bank of Australia

b) Australian Competition and Consumer Commission

c) Australian Transaction Reports and Analysis Centre

d) Australian Prudential Regulation Authority

a. (b) & (c)

b. (a) & (d)

c. (c) & (d)

d. (a), (c) & (d)

A

b. (a) & (d)

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25
Q

The Australian Prudential Regulatory Authority (APRA) regulates:

a) General insurance providers

b) Managed investment schemes

c) Superannuation providers

d) Authorised Deposit-taking Institutions (ADIs)

a. (a), (b) & (c)

b. (b), (c) & (d)

c. (a), (c) & (d)

d. (d) only

A

c. (a), (c) & (d)

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26
Q

The movement of illegal funds in order to conceal their true origin is what stage of the money laundering cycle?

a. Placement

b. Layering

c. Integration

d. Withdrawal

A

b. Layering

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27
Q

Which of the following pieces of information is classified as “sensitive” under the Australian Privacy Principles (APPs)?

a. Ethnic origin

b. Email address

c. Credit card details

d. Date and year of birth

A

a. Ethnic origin

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28
Q

The International Basel Accords, set by the Basel Committee on Banking Supervision (BCBS) influence Australian banking culture and products through the establishment of:

a. financial stability rules for national governments

b. minimum capital requirements for member organisations

c. risk management identification tools for member organisations

d. responses to the Global Financial Crisis (GFC) for national governments

A

b. minimum capital requirements for member organisations

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29
Q

For a contract to be considered valid between two parties it must contain which of the following elements?

a) Offer and acceptance

b) Genuine consent of the parties

c) Legal capacity of the parties to act

d) Facility for payment to be processed

a. (a) & (b)

b. (b) & (c)

c. (a), (b) & (c)

d. (b), (c) & (d)

A

c. (a), (b) & (c)

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30
Q

Under this important legal principle “one person (for example the customer) usually in a position of vulnerability, puts confidence, good faith, reliance and trust in another (for example, the bank), whose aid, advice or protection is sought in some matter”.

What is the legal principle being described?

a. Precedent

b. Statute duty

c. Fiduciary duty

d. Prudential rules

A

c. Fiduciary duty

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31
Q

Products and services offered by the bank will vary depending on the customer’s legal business structure.

Which of the following describes the “company” structure?

a. Separate legal entity and shareholders not personally liable for debts

b. Individual person with sole responsibility for the business and unlimited liability

c. Separate legal entity where financial assets are administrated on behalf of beneficiaries

d. Two or more individuals who run a business together with shared control and management

A

a. Separate legal entity and shareholders not personally liable for debts

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32
Q

Five major energy suppliers have unofficially set a lowest price (a price floor) for retail energy supply. All five suppliers agree to keep their own lowest price above this floor.

Under the Competition and Consumer Act 2010, this is an example of a:

a. cartel

b. non-exclusive deal

c. misuse of market power

d. collective bargaining agreement

A

a. cartel

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33
Q

A related entity of ABC Bank is applying an Australian Financial Services (AFS) license as a provider of financial products.

ABC Bank needs to apply to which financial regulatory body?

a. APRA

b. ASIC

c. ACCC

d. AUSTRAC

A

b. ASIC

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34
Q

Which international body is instrumental in the identification of systemic risk in the international financial sector?

a. Group of 20

b. Financial Stability Board

c. United National Environment Program

d. Basel Committee on Banking Supervision

A

b. Financial Stability Board

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35
Q

Which of the following statements are ADVANTAGES of transaction 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)

b. (b), (c) & (d)

c. (c) & (d)

d. (a), (b) & (d)

A

d. (a), (b) & (d)

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36
Q

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

Amazing Pay is an example of an example of which of the following?

a. Electronic purse

b. Online banking

c. Payment intermediary

d. Contactless payment

A

c. Payment intermediary

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37
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 the cardholders

c. Interest charged to cardholders who do not repay their balance in full by the due date

d. Promotion to cardholders on other facilities such as electronic purses and digital wallets

a. (c) only

b. (a) & (c)

c. (a), (c), & (d)

d. (b), (c) & (d)

A

b. (a) & (c)

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38
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) & (c)

b. (a), (b) & (d)

c. (b) & (d)

d. (a) & (d)

A

. (a), (b) & (d)

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39
Q

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

a) always act in good faith.

b) require medical examinations for all persons applying for a life insurance policy.

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) & (b)

b. (a), (c) & (d)

c. (b), (c) & (d)

d. (a) & (d)

A

b. (a), (c) & (d)

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40
Q

Which of the following defines an indemnity 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 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 against

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

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41
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

42
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. (b) & (c)

b. (a), (c) & (d)

c. (b) & (c)

d. (a) & (c)

A

d. (a) & (c)

43
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

44
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

45
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

46
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 easy 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

47
Q

How do finance companies generally raise their funds?

A. Share issues and wholesale markets
B. Money Markets
C. Retail Deposits and share issues
D. Wholesale and retail markets

A

D. Wholesale and Retail markets

48
Q

A broad ranging ethical decision for the banking and finance industry is the approach to remuneration. When a bank designs a remuneration, reward and recognition system, a key ethical focus to consider must be how to drive which appropriate behaviour?

A. Ensuring the ‘success’ is not skewed towards profitability at the expense of putting a customer’s interest first
B. Designing reward and recognition incentives based solely on financial performance
C. Ensuring reward & recognition incentives and specifically aligned to targets
D. Ensuring reward and remuneration incentives are limited to compliance, client feedback and NPS if available

A

A. Ensuring the ‘success’ is not skewed towards profitability at the expense of putting a customer’s interest first

49
Q

Which of the following is one of the basic rules of deontology to promote a well-ordered ethical society?

A. When in Rome, do as the Romans do
B. Always work through the consequences
C. Be the best you can be
D. You cannot user people as a means to an end

A

D. You cannot user people as a means to an end

50
Q

The shift in value of investments as we move from fossil fuels to renewable energy is an example of what type of climate change financial risk for banks?

A. Liability risk
B. Transition risk
C. Physical Risk
D. Business Continuity Risk

A

B. Transition Risk

51
Q

How would a deontologist view justify killing a person about to commit a terrorist act if it meant saving the lives of many others?

A. It would not be justified as they would not be reflecting the best person they could be
B. It would be justified as the ‘ends justifies the means’
C. It would not be justified as it is wrong to kill
D. It would be justified as the potential terrorists is not living their best lives

A

C. It would not be justified as it is wrong to kill

52
Q

At what step of the Five Step Process for Resolving Ethical Dilemmas would you ‘consider all the available options’?

A. Recognise and define
B. Implementation
C. Discuss with others
D. Potential Actions

A

D. Potential Actions

53
Q

Which of the following statements about Environmental, Social and Governance (ESG) is correct?

A. ESG helps inform others about the culture, values and goals of an organisation
B. ESG documents an organisation’s environmental credentials
C. ESG provides a quantitative measure of a company’s impact on society
D. ESG describes an organisation’s framework for corporate social responsibility

A

C. ESG provides a quantitative measure of a company’s impact on society

54
Q

ISO 26000 is an international standard covering social responsibility. Which one of the following is not considered a core subject?

A. Human rights
B. Shareholder returns
C. Organisational governance
D. Consumer issues

A

B. Shareholder returns

55
Q

Which of the following is true regarding Corporate Social Responsibility?

A. It is a legal requirement that a business must pursue business goals that are good for society
B. It is about how an organisation manages it’s business in order to have an overall positive impact on society
C. It concerns listening to the community as a whole and especially shareholders
D. It includes a willingness to comply with all regulatory requirements as soon as they are published

A

B. It is about how an organisation manages it’s business in order to have an overall positive impact on society

56
Q

Which Australian regulator has responsibility for prohibiting anti-competitive behaviour?

A. AUSTRAC
B. APRA
C. ASIC
D. ACCC

A

D. ACCC

57
Q

The Financial Services Reform Act 2001 established which of the following?

A. A new disclosure regime for all financial products
B. A revised complaints process
C. A ‘whistle blower’ policy’
D. Updated requirements for Tier 1 capital

A

A. A new disclosure regime for all financial products

58
Q

What term involves the used of online and social media channels to raise funds for a specific project or business idea?

A. Private placement
B. Crowd funding
C. Blockchain
D. Secondary debentures

A

B. Crowd funding

59
Q

Examine internal requirements, including risk appetite, governance approach, capabilities values, regulatory obligations and competitive environment

This statement explains which step of the ISO 31000: 2009 - Risk Management Principles and Guidelines

A. Assess the Risk
B. Monitor and Review
C. Establishing the context
D. Communication and consultation

A

C. Establishing the context

60
Q

The Australian Prudential Regulatory Authority (APRA) imposes prudential standards on the banking sector

The risks of changes to prudential standards is significant and can lead to which of the following for banks?

A. Decreased risk appetite
B. Increased operational costs
C. Increased compliance costs
D, Decreased risk management control

A. a & d
B. b & c
C. c & d
D. a & c

A

B. b & c

61
Q

CDE Bank reports monthly on employee retention and turnover, with comparisons to previous months and overall yearly trends

This report is an example of which of the following?

A. Key Risk Indicator
B. People Risk Indicator
C. Risk Impact Assessment
D. Performance Target Reportins

A

A. Key Risk Indicator

62
Q

Which of the following is a task of the internal audit line of defence?

A. Review of the bank’s internal policy and procedures
B. Monitoring of financial risks and financial reporting issues
C. Review of all functions of the bank, including all business processes
D. Undertake daily tasks in line with the bank’s established risk appetite

A

C. Review of all functions of the bank, including all business processes

63
Q

Which of the following roles do banks pay in society and the economy as a whole?

A. Facilitate the creation of money, act as a financial intermediary and regulate the cash flow of money into the Australian economy
B. Facilitate the creation of money, act as a financial intermediary and contribute to the economy’s development
C. Act as a financial intermediary, regulate the cash flow of money into the Australian economy and implement interest rate changes aligned to the economy’s needs
D. Act as a financial intermediary, regulate the cash flow of money into the Australian economy and contribute to the economy’s development

A

B. Facilitate the creation of money, act as a financial intermediary and contribute to the economy’s development

64
Q

Which of the best describes fiscal policy?

A. Maintaining price stability by managing the inflation rate
B. Setting interest rates
C. Government spending and taxation that influences the economy
D. Controlling the supply of money

A

C. Government spending and taxation that influences the economy

65
Q

In 2013, former Treasurer Joe Hockey, instigated which of the following, which he decreed would be setting the direction for Australia’s financial system?

A. A Financial Sector Review
B. A Financial System Enquiry
C. A Financial Deregulation Review
D. A Financial Conduct Enquiry

A

B. A Financial System Enquiry

66
Q

Which of the following would you expect to see on the liabilities side of the bank’s balance sheet?

A. Share capital, home loans, debt issues
B. Debt issues, discounted bills
C. Other demand deposits, debt issues and transaction deposits
D. Other Demand deposits, equipment and share capital

A

C. Other demand deposits, debt issues and transaction deposits

67
Q

Which is true regarding the RBA?

A. It acts as the central bank for Australia
B. Is was established by the Reserve Bank Act 1947
C. It aims to keep the consumer price inflation under 2%
D. It conducts the country’s fiscal policy

A

A. It acts as the central bank for Australia

68
Q

Which threat is both real and imminent within the payments industry?

A. Over-regulation?
B. Decentralisation
C. Disintermediation
D. Intermediation

A

C. Disintermediation

69
Q

How often is the CPI calculated?

A. Monthly
B. Six-monthly?
C. Weekly
D. Quarterly

A

D. Quarterly

70
Q

Solvency is a key financial performance requirement for banks. Which option best describes the term solvency?

A. The ability of the bank to meet all it’s anticipated expenses using only liquid assets
B. The ability of a bank to meet its long term financial obligations
C. The ability of the banker to generate earnings compared to expenses and other costs during a defined period of time
D. The ability of the bank to meets its commitments to shareholders and creditors

A

B. The ability of a bank to meet its long term financial obligations

71
Q

Which of the following statements is correct regarding APR’s ‘Prudential Practice Guide on Managing Climate Change Financial Risks’?

A. It imposes additional obligations on regulated entities to manage climate related financial risks
B. It requires regulated entities to conduct climate vulnerability assessments every five years
C. It provides high-level guidance and principles for sound financial risk management in relation to climate change
D. It does not expect regulated entities to consider making climate-related financial disclosures to relevant stakeholders

A

C. It provides high-level guidance and principles for sound financial risk management in relation to climate change

72
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. Intimidation
B. Self interest
C. Self review
D. Advocacy

A

D. Advocacy

73
Q

ISO 26000 is an international standard covering social responsibility. Which is 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

74
Q

In Cathy O’neil’s book ‘Weapons of Math Destruction’ (Crown 2017) two elements are outlines that are required to build an algorithm, namely

A. Data and bias parameters
B. Definition of success and autonomous capability
C. Data and a definition of success
D. Autonomous capability and data

A

C. Data and a definition of success

75
Q

A bank might mitigate the ‘familiarity’ threat to professionalism by implementing certain actions. Which action is not associated with mitigating the treat to familiarity?

A. Rotating peoples roles
B. Involving others who do not have a personal relationship with the customer
C. Obtaining independent reports or reviews
D. Removing commissions

A

D. Removing commissions

76
Q

At what step of the Five Step Process for Resolving Ethical Dilemmas would you ‘consider all available options’?

A. Discuss with others
B. Implementation
C. Recognise and define
D. Potential actions

A

D. Potential Actions

77
Q

Which one of the following is not one of the steps in the Five Step Process for Resolving Ethical Dilemmas?

A. Feedback
B. Implementation
C. Recognise and define
D. Potential actions

A

A. Feedback

78
Q

The board framework for regulation is coordinated by the Australian Government through the Treasury and which other body?

A. APRA
B. RBA
C. The Council of Financial Regulators
D. ASIC

A

C. The Council of Financial Regulators

79
Q

Which of the following was first introduced within Basel 111?

A. Disclosure and market discipline requirements
B. A global framework for bank liquidity regulation
C. Min. Capital Requirements
D. Governance Requirements

A

C. Min. Capital Requirements

80
Q

Which Australian regulator has responsibility for prohibiting anti-competitive behaviour?

A. APRA
B. ACCC
C. ASIC
D. AUSTRAC

A

B. ACCC

81
Q

The financial Services Reform Act 2001 established which of the following?

A. A whistleblower program
B. A new document regime for all financial products
C. Updated requirements for Tier 1 capital
D. A revised complaints process

A

B. A new document regime for all financial products

82
Q

Which of the following would you expect to see on the liabilities side of the banks balance sheet?

A. Share capital, home loans, debt issues
B. Debt Issues, discounted bills and premises
C. other demand deposits, debt issues and transaction deposits
D. Other demand deposits, equipment and share capital

A

C. other demand deposits, debt issues and transaction deposits

83
Q

Ben is a financial advisor and is considering the financial solutions for one of his important clients, whom he knows quite well. He has two options, one of which will pay him slightly more commission than the others, but will be less suitable for the client. What threat to professionalism is Ben facing?

A. Advocacy
B. Familiarity
C. Self Review
D. Self Interest

A

D. Self Interest

84
Q

Which statement is correct regarding moral absolutism?

A. It is a form of deontology and there are certain universal moral principles by which all people’s actions may be judges
B. It is a form of deontology and there is no universal set of moral principles
C. It aligns to the moral values within culture and is a form of deontology
D. There is no universal set or moral principals and aligns to the moral values within culture

A

A. It is a form of deontology and there are certain universal moral principles by which all people’s actions may be judges

85
Q

Which of the following is correct regarding rules-based and principles based codes?

A. Many codes are a mixture of both rules and principles
B. The rules-based approach sets out ‘high-level’ principles
C. Principles-based codes usually refer to acting in response to organisational policies
D. There is little room for subjectivity with principles-based codes

A

A. Many codes are a mixture of both rules and principles

86
Q

The RBA Board ensures that monetary policies contribute to which of the followins?

A. The stability of the AUD, maintaining full employment and management of prudential risks
B. Managing prudential risks, the stability of the AUD through inflation measures and maintaining prudential risks
C. Maintaining full employment, the economic prosperity and welfare of the people of Australia and managing prudential risks
D. The stability of the AUD, maintaining full employment and the economic prosperity and welfare of the people of Australia

A

D. The stability of the AUD, maintaining full employment and the economic prosperity and welfare of the people of Australia

87
Q

What is the FIRST line of defence in the ‘three lines of defence’?

A. Risk Management Committee
B. Operational Manager
C. Internal Audit
D. Internal Compliance

A

B. Operational Manager

88
Q

Which of the following describes the risk associated with the vulnerability of a line of business to changes in the business environment?

a) Interest rate risk

b) Market risk

c) Sustainability risk

d) Business risk

A

d) Business risk

89
Q

The risk that problems arise in other internal business channels which could compromise the financial and operational position of the ADI is referred to as what type of Risk?

a) Related entity (Contagion) Risk

b) Market Risk

c) Business Risk

d) Operational Risk

A

a) Related entity (Contagion) Risk

90
Q

What is the process of risk assessment?

a) Identification, analysis, and evaluation

b) Establish, monitor and review

c) Consultation, identification, and review

d) Identification, analysis, and review

A

a) Identification, analysis, and evaluation

91
Q

What makes an effective Key Risk Indicator, select the correct response:

a) People, Process, Systems

b) Measurable, Predictable, Informational

c) Clear, Concise, Comparable

d) High performance, Automated, Reportable

A

b) Measurable, Predictable, Informational

92
Q

Absolute risk is the situation where…

a) There is a possibility of a loss or a gain

b) There is either a chance of loss or no loss

c) There is no chance of gain

d) (b) and (c)

A

d) (b) and (c)

93
Q

The Banking Accountability Executive Regime (BEAR) commenced in 2018. Which of the following does it NOT include:

a) Executive registration with APRA

b) APRA must approve all remuneration packages for banking Executives

c) Remuneration deferral

d) Penalties for ADIs

A

b) APRA must approve all remuneration packages for banking Executives

94
Q

What is the considered to be the third line of defence:

a) Internal Audit

b) Risk Team

c) Controls Function

d) Business Operations

A

a) Internal Audit

95
Q

What are the three lines of defence?

a) Internal Audit, Risk Team, Controls Function

b) Risk Team, Controls Function, Business Operations

c) Controls Function, Internal Audit, Business Operations

d) Business Operations, Risk Team, Internal Audit

A

d) Business Operations, Risk Team, Internal Audit

96
Q

Ethical principals underpin every code of conduct. While each code is different there are some common themes. Based on Schwartz’s paper, Universal Moral Values for Corporate Code of Ethics, there are six universal moral values that underpin all codes Which of the following is not considered one of the six moral codes
a. Obey the law
b. Caring and doing no harm
c. Citizenship
d. fairness

A

a. Obey the law

97
Q

Which Australian regulator has responsibility for prohibiting anti-competitive behaviour?
a. AUSTRAC
b. ASIC
c. ACCC
d. APRA

A

c. ACCC

98
Q

Which body is responsible for administering the Privacy Act?
a. The office of Australian Data Protection and Information
b. The office of the Australian Information Commissioner
c. The Australian Information Office
d. The Australian Data Protection and Information Commissioner’s office

A

b. The office of the Australian Information Commissioner

99
Q

Which of the following was first introduced within Basel 3?
a. Disclosure and market discipline requirements
b. Governance Requirements
c. A global framework for bank liquidity regulation
d. Minimum capital requirements

A

. A global framework for bank liquidity regulation

100
Q

Before giving general advice to customers, what document must you provide to them?
a. Product Disclosure Statements
b. Financial Services Guide
c. Key Features Document
d. Statement of Advice

A

b. Financial Services Guide

101
Q

Which is outside the responsibility of the Australian Financial Complaints Authority (AFCA)
a. Consider complaints re: superannuation
b. Provide Legal advice
c. Direct a bank to release security over a debt
d. Consider complaints relating to insurance

A

b. Provide Legal advice

102
Q

BEAR is overseen by which body?
a. ASIC
b. RBA
c. APRA
d. CFR

A

c. APRA

CQIB (2 decks)

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