CERTIFIED AML FINTECH COMPLIANCE ASSOCIATE (CAFCA)
TEST FINAL EXAM 2026/2027 ACTUAL EXAM COMPLETE
EXAM QUESTIONS WITH DETAILED VERIFIED ANSWERS
(100% CORRECT ANSWERS) /FINTECH FINAL EXAM LATEST
UPDATE ALREADY GRADED A+
1. What is financial crime?
A) Only illegal activities involving large sums of money
B) Illegal activities that typically are economically motivated
C) Only activities that cross international borders
D) Any activity that results in a financial loss to a company
Answer B: Illegal activities that typically are economically motivated
Rationale: Financial crime includes money laundering, terrorist financing,
sanctions violations, fraud, bribery, corruption, and tax evasion .
2. Name the three basic stages of money laundering.
A) Concealment, transfer, and spending
B) Placement, layering, and integration
C) Deposit, withdrawal, and transfer
D) Collection, distribution, and repatriation
Answer B: Placement, layering, and integration
,Rationale: Money laundering consists of placement (introducing illicit funds),
layering (obscuring the source through complex transactions), and integration
(returning funds to appear legitimate) .
3. State the key difference between money laundering and terrorist
financing.
A) Terrorist financing always involves larger amounts of money
B) Terrorist financing uses funds that are not necessarily derived from illegal
activities
C) Money laundering only occurs across borders
D) There is no difference
Answer B: Terrorist financing uses funds that are not necessarily derived from
illegal activities
Rationale: Terrorist financing supports terrorist activities with funds that may
come from legal sources, whereas money laundering always involves proceeds of
illegal activities .
4. What are the main types of sanctions and who do they target?
A) Only financial sanctions targeting governments
B) Financial, economic, and trade sanctions targeting individuals, organizations,
and countries
C) Only trade sanctions targeting corporations
D) Only economic sanctions targeting individuals
,Answer B: Financial, economic, and trade sanctions targeting individuals,
organizations, and countries
Rationale: Sanctions are political decisions made as part of diplomatic efforts,
intended to affect behavioral change through deterrence, prevention, or
punishment .
5. List the three major reasons people commit fraud, and what this model is
called.
A) Greed, opportunity, and capability – Fraud Triangle
B) Pressure, opportunity, and rationalization – Fraud Triangle
C) Need, greed, and fear – Fraud Diamond
D) Pressure, capability, and rationalization – Fraud Diamond
Answer B: Pressure, opportunity, and rationalization – Fraud Triangle
Rationale: The Fraud Triangle explains fraud as the combination of financial
pressure, opportunity to commit the act, and rationalization of the behavior .
6. Name two important pieces of anti-bribery and corruption legislation with
extra-territorial reach.
A) The Foreign Corrupt Practices Act (US) and The UK Bribery Act 2010
B) The US Patriot Act and the EU Anti-Corruption Directive
C) The Swiss Banking Act and the UK Fraud Act
D) The FATF Recommendations and the UN Convention Against Corruption
, Answer A: The Foreign Corrupt Practices Act (US) and The UK Bribery Act
2010
Rationale: The FCPA and UK Bribery Act have significant extra-territorial reach,
allowing prosecution of organizations for bribery committed outside their home
countries .
7. State the difference between tax avoidance and tax evasion.
A) Tax avoidance uses legal practices to reduce taxes owed, whereas tax evasion
uses illegal practices
B) Tax avoidance is for individuals, tax evasion is for corporations
C) Tax evasion is legal, tax avoidance is illegal
D) There is no substantive difference
Answer A: Tax avoidance uses legal practices to reduce taxes owed, whereas
tax evasion uses illegal practices
Rationale: Tax avoidance is legal tax minimization, while tax evasion involves
illegal actions to evade paying taxes owed .
8. Name an example of a politically exposed person (PEP).
A) Any wealthy individual
B) A celebrity with significant public influence
C) Heads of state, senior politicians, senior government officials, and their families
D) Anyone who makes political donations
TEST FINAL EXAM 2026/2027 ACTUAL EXAM COMPLETE
EXAM QUESTIONS WITH DETAILED VERIFIED ANSWERS
(100% CORRECT ANSWERS) /FINTECH FINAL EXAM LATEST
UPDATE ALREADY GRADED A+
1. What is financial crime?
A) Only illegal activities involving large sums of money
B) Illegal activities that typically are economically motivated
C) Only activities that cross international borders
D) Any activity that results in a financial loss to a company
Answer B: Illegal activities that typically are economically motivated
Rationale: Financial crime includes money laundering, terrorist financing,
sanctions violations, fraud, bribery, corruption, and tax evasion .
2. Name the three basic stages of money laundering.
A) Concealment, transfer, and spending
B) Placement, layering, and integration
C) Deposit, withdrawal, and transfer
D) Collection, distribution, and repatriation
Answer B: Placement, layering, and integration
,Rationale: Money laundering consists of placement (introducing illicit funds),
layering (obscuring the source through complex transactions), and integration
(returning funds to appear legitimate) .
3. State the key difference between money laundering and terrorist
financing.
A) Terrorist financing always involves larger amounts of money
B) Terrorist financing uses funds that are not necessarily derived from illegal
activities
C) Money laundering only occurs across borders
D) There is no difference
Answer B: Terrorist financing uses funds that are not necessarily derived from
illegal activities
Rationale: Terrorist financing supports terrorist activities with funds that may
come from legal sources, whereas money laundering always involves proceeds of
illegal activities .
4. What are the main types of sanctions and who do they target?
A) Only financial sanctions targeting governments
B) Financial, economic, and trade sanctions targeting individuals, organizations,
and countries
C) Only trade sanctions targeting corporations
D) Only economic sanctions targeting individuals
,Answer B: Financial, economic, and trade sanctions targeting individuals,
organizations, and countries
Rationale: Sanctions are political decisions made as part of diplomatic efforts,
intended to affect behavioral change through deterrence, prevention, or
punishment .
5. List the three major reasons people commit fraud, and what this model is
called.
A) Greed, opportunity, and capability – Fraud Triangle
B) Pressure, opportunity, and rationalization – Fraud Triangle
C) Need, greed, and fear – Fraud Diamond
D) Pressure, capability, and rationalization – Fraud Diamond
Answer B: Pressure, opportunity, and rationalization – Fraud Triangle
Rationale: The Fraud Triangle explains fraud as the combination of financial
pressure, opportunity to commit the act, and rationalization of the behavior .
6. Name two important pieces of anti-bribery and corruption legislation with
extra-territorial reach.
A) The Foreign Corrupt Practices Act (US) and The UK Bribery Act 2010
B) The US Patriot Act and the EU Anti-Corruption Directive
C) The Swiss Banking Act and the UK Fraud Act
D) The FATF Recommendations and the UN Convention Against Corruption
, Answer A: The Foreign Corrupt Practices Act (US) and The UK Bribery Act
2010
Rationale: The FCPA and UK Bribery Act have significant extra-territorial reach,
allowing prosecution of organizations for bribery committed outside their home
countries .
7. State the difference between tax avoidance and tax evasion.
A) Tax avoidance uses legal practices to reduce taxes owed, whereas tax evasion
uses illegal practices
B) Tax avoidance is for individuals, tax evasion is for corporations
C) Tax evasion is legal, tax avoidance is illegal
D) There is no substantive difference
Answer A: Tax avoidance uses legal practices to reduce taxes owed, whereas
tax evasion uses illegal practices
Rationale: Tax avoidance is legal tax minimization, while tax evasion involves
illegal actions to evade paying taxes owed .
8. Name an example of a politically exposed person (PEP).
A) Any wealthy individual
B) A celebrity with significant public influence
C) Heads of state, senior politicians, senior government officials, and their families
D) Anyone who makes political donations
