CAMS EXAM PRACTICE QUESTIONS WITH ALL CORRECT
& 100% VERIFIED ANSWERS|ACTUAL COMPLETE EXAM
|LATEST UPDATE (JUST RELEASED)
How do drug traffickers and other criminals use the fine art industry to disguise illicit proceeds?
A. They use forged or fraudulent invoicing of priceless works of art by auction houses B. They
commingle legitimate and illicit proceeds by principals for payment of fine art C. They immediately
resell priceless works of art after purchase from a foreign auction house D. They use anonymous
agents to buy the art and have the payment wired from offshore havens ✔Correct Answer-D
An anti-money laundering specialist at a large institution is responsible for informing senior
management about the status of the anti-money laundering program across the organization. Which
report is the most useful?
A. The total credit exposure for non-cooperative countries and territories B. Results of related audits
and examinations C. Details on inquiries received from law enforcement D. Notification of
management changes in the different major divisions ✔Correct Answer-B
What is most valuable when using the internet as an investigative source?
A. A team of AML investigators B. A reference list of websites known to yield credible information C.
A combination of independent thinking and technical skills D. A powerful search engine ✔Correct
Answer-B
What should senior management do in order to promote a culture of anti-money laundering
compliance?
A. They should include compliance with AML procedures as condition of employment B. They should
attend all training sessions with front-line employment C. They should have close ties with the
independent auditors of the AML program D. They should base employee compensation on the
amount of suspicious activity they detect ✔Correct Answer-A
What is the result of an increased awareness of the potential for gatekeepers to assist in money
laundering in recent years?
A. The IMF has raised the profile of gatekeepers, requiring that countries regulate them B. Lawyers
who represent money launderers can more easily be prosecuted C. Accountants are no longer
considered gatekeepers, since they are not permitted to set up companies or trusts D. The FATF
recommendations cover lawyers performing financial transactions ✔Correct Answer-B
Which three are principles found in the document "Principles of information Exchange between
Financial Intelligence Units (FIUs)"?
A. The exchange of information between FIUs should take place as informally and as rapidly as
possible and with no prerequisites, while guaranteeing protection of privacy and confidentiality of
the shared data B. Differences in the definition of offenses that fall under the competence of FIUs
should be before free exchange of information takes place C. The Egmont principle of free exchange
of information at the FIU level should be possible on the basis of reciprocity, including spontaneous
exchange D. It should be possible for communication between FIUs to take place directly and without
intermediaries ✔Correct Answer-A,C,D
What are three risk factors a financial institution should examine with regard to a proposed new
product? A. The complexity of the product B. The need to verify the identification of the customer C.
,Whether the product is easily transferable D. Whether other financial institutions are marketing the
product ✔Correct Answer-A,B,C
In some instances, a financial institution may receive a warrant from law enforcement authorities to
search its premises. A search warrant is a grant of permission from a court for a law enforcement
agency to search certain designated premises and seize specific categories of items or information.
Generally, what is the required threshold for the requesting agency to establish in order to obtain a
search warrant of a financial institution?
A. Reasonable belief B. Probable cause C. A preponderance of the evidence D. Clear and Convincing
proof ✔Correct Answer-A
Which three characteristics make non-profit organizations vulnerable to misuse for terrorist
financing? A. Enjoying the public trust B. Having access to a considerable sources of funds C. Being
listed as government nonprofit organization D. Having a global presence for national and
international operations and financial transactions ✔Correct Answer-A, B, D
An anti-money laundering specialist at a financial institution has received a legal request to provide
all transaction records for a specific individual since 2004. Which three items should be delivered?
A. Monthly statements and transaction activities for that individual since 2004 B. All wire transfer for
that individual since 2004 C. All security trading activities for that individual since 2004 D. Signature
cards from accounts opened by that individual since 2004 ✔Correct Answer-A,B,C
How do payable through accounts (PTAs) differ from normal foreign correspondent accounts? A. The
customers do not have to worry about sanctions list screening such as OFAC B. The customers have
the ability to directly control funds at the correspondent bank C. The customers can contact the
correspondent bank directly to send wire transfers D. The customers can hide their identity through
the use of cover payments in U.S. dollars ✔Correct Answer-A
What is the term for trading through multiple accounts, where an individual generates offsetting
profits and losses and transfers of positions through accounts that do not appear to be commonly
controlled?
A. Ponzi scheme B. Market Manipulation C. Net Trading D. Wash Trading ✔Correct Answer-D
The Wolfsberg Principles for Private Banking list circumstances that would require additional due
diligence, including activities that involve which three of these choices? A. Foreign jurisdictions B.
High Risk Countries, including those identified by credible sources as having inadequate Anti-Money
Laundering standards C. High Risk activities, involving clients and beneficial owners whose source of
wealth originates from activities known to be vulnerable to money laundering D. Public officials,
including those individuals who have or had positions of public trust ✔Correct Answer-B,C,D
Which three are examples of best practices terms of ensuring an adequate AML program? A. Engage
an independent party to perform a periodic review of the program B. Review applicable domestic
and international AML guidance C. Perform a risk analysis on a regular basis and compare it to the
coverage of the AML program D. Review the accuracy of account opening applications ✔Correct
Answer-B,C,D
Which three statements are true regarding the extraterritorial reach of laws and legislation of the
U.S.? A. The criminal anti-money laundering law can apply to transactions that occur partially
overseas B. Economic and trade sanctions by OFAC may pose extraterritorial risks for financial
institutions and businesses outside the U.S. C. The extraterritorial reach covers all transactions
,throughout the global economy D. The defendant does not need to know the funds came from an
illegal activity under state, federal or foreign law ✔Correct Answer-A,B,D
What is a criterion for FATF membership? A. The country should be democracy B. The country should
be a member of a FATF-style regional body C. The country should have already implemented all of
the FATF Recommendations D. The country should have already implemented the standards of the
European Union Directives ✔Correct Answer-B
According to the Second European Union Money Laundering Directive, what may knowledge of
criminal conduct be inferred from? A. Subjective, factual circumstances B. Objective, factual
circumstances C. Objective, non-factual circumstances D. Subjective, non-factual circumstances
✔Correct Answer-B
In which type of banking transaction is price manipulation, as a form of money laundering, a
common practice?
A. Redeeming an annuity B. Sending a wire transfer C. Issuing a letter of credit D. Subscribing to a
cash management account ✔Correct Answer-C
Which two aspects of the security broker dealer industry increase its exposure to money laundering?
Choose 2 answers A. The routine use of wire transfers from, to or through multiple jurisdictions B.
They easy conversion of holdings to cash with significant loss of principal C. Disposing of cash
through securities purchases D. Fast paced transactions conducted electronically ✔Correct
Answer-C,D
To ensure that an institution's anti-money laundering program is current, which step should be
taken?
A. The program should be evaluated and updated at least every six months be the Board of Directors
B. The program should be reviews by a federal law enforcement officer for gaps in controls C. The
program should be sent to the institution's government regulator on a periodic basis D. The program
should be reassessed at least annually ✔Correct Answer-D
A prospective AML officer comes highly recommended by a bank's up-stream correspondent
institution of similar size and make-up, located in a different city in the same country. The bank is
interested in hiring the individual. What should be the next step taken by the Board of Directors? A.
Do a thorough background check B. Confer with its regulatory agency to determine whether it is
appropriate to hire the person C. Hire the individual, relying on the recommendation of its
correspondent D. Hire the individual on a probationary basis so that the institution can determine if
the individual is sufficiently experienced and capable ✔Correct Answer-A
Which type of transactions present the highest risk? A. Wire transfers from a publicly listed company
B. Payroll payments C. Social insurance payments D. Foreign exchanges ✔Correct Answer-D
According to experts, what is the most effective way to prevent money laundering through financial
institutions? A. ensuring that transaction monitoring systems can identify terrorist financing B.
collecting information on beneficial owners in foreign customers C. instituting a policy prohibiting the
acceptance of funds intended for terrorist financing D. implementing a sound customer due diligence
program ✔Correct Answer-D
What should a bank focus on to ensure ongoing compliance with its AML program? A. it should
ensure that it develops and provides ongoing targeted training of all current and new employees B. it
should subject all new employees to criminal background checks before being hired C. it should
, review and update its transaction monitoring system D. it should ensure that the regulators have
reviewed and have approved the banks AML program ✔Correct Answer-A
What should a compliance officer do during an ongoing investigation into a clients activities by a
competent authority? A. ensure communication with regulatory and law enforcement authorities is
conducted only through the board of directors B. communicate only in writing regulatory in law
enforcement authorities in line with applicable local laws C. communicate with regulatory and law
enforcement authorities in line with applicable local laws D only provide information that is
specifically and directly requested ✔Correct Answer-A
How can dealers in high value items be at risk for money laundering? A. the value of precious metals
such as gold and silver is constantly fluctuating B. carrying large amounts of Jens of high value is
physically easy C. paperwork is not required to ship precious metals and gems D. drug dealers prefer
cash to precious metals and Jim ✔Correct Answer-B
Which activity is most likely to facilitate money laundering through online systems with inadequate
controls A. conducting a large volume of transactions B. providing continuous worldwide access C.
conducting anonymous transactions D. conducting large value transaction ✔Correct Answer-B
In the FATF 40 recommendations the focus on AML efforts has been expanded beyond financial
institutions. which 3 businesses and or professions are covered? Choose 3 answers A. casinos when
customers engage in financial transactions equal to or above a designated threshold B. Real estate
agents when they are involved in transactions for clients concerning buying and selling properties C.
dealers in art when they engage in any cash transaction with a customer at or above a designated
threshold D. trust and company service providers ✔Correct Answer-B, C, D
When requested by law enforcement via legal process to provide records or documentation what
should the officers of financial institutions do? A. provide all records and documents the officer
believes would be pertinent to the law enforcement agent's investigation B. Refuse to provide any
records or documents until the agent narrows the scope of the request down to what he or she
actually needs C. Not act on the legal process until the bank officer has contact with the agent and
learns what the agent is investigating D. if there is no basis for contesting the requeat, provide what
is requested ✔Correct Answer-C
Which AML standards have force of law? A. standards as defined in the third European Union money
laundering directive B. standards as defined by the united nations C. standards as defined by world
bank/international monetary fund (IMF) D. 40 recommendations ✔Correct Answer-A
What are some red flags pertaining to potentially suspicious transactions by a customer? Choose 3
A. Having multiple addresses and/or moving frequently B. Having a commercial account with cash
deposits C. Have a common address with several other bank clients D. Having multiple individuals
use the ATM card connected with the account in different cities ✔Correct Answer-A, C, D
An anti-money laundering expert is hired by a new internet bank to assess the money laundering
threat to the bank. What is the most important recommendation for the expert to make given it is an
online bank?
A. The bank should limit the amount of money which can be processed per transaction B. The bank
should ensure that prospective new customers can be properly identified C. The bank should set up
automated programs to analyze transactions for money laundering activity D. The bank should
ensure that a firewall is set up to protect the transactions ✔Correct Answer-A
& 100% VERIFIED ANSWERS|ACTUAL COMPLETE EXAM
|LATEST UPDATE (JUST RELEASED)
How do drug traffickers and other criminals use the fine art industry to disguise illicit proceeds?
A. They use forged or fraudulent invoicing of priceless works of art by auction houses B. They
commingle legitimate and illicit proceeds by principals for payment of fine art C. They immediately
resell priceless works of art after purchase from a foreign auction house D. They use anonymous
agents to buy the art and have the payment wired from offshore havens ✔Correct Answer-D
An anti-money laundering specialist at a large institution is responsible for informing senior
management about the status of the anti-money laundering program across the organization. Which
report is the most useful?
A. The total credit exposure for non-cooperative countries and territories B. Results of related audits
and examinations C. Details on inquiries received from law enforcement D. Notification of
management changes in the different major divisions ✔Correct Answer-B
What is most valuable when using the internet as an investigative source?
A. A team of AML investigators B. A reference list of websites known to yield credible information C.
A combination of independent thinking and technical skills D. A powerful search engine ✔Correct
Answer-B
What should senior management do in order to promote a culture of anti-money laundering
compliance?
A. They should include compliance with AML procedures as condition of employment B. They should
attend all training sessions with front-line employment C. They should have close ties with the
independent auditors of the AML program D. They should base employee compensation on the
amount of suspicious activity they detect ✔Correct Answer-A
What is the result of an increased awareness of the potential for gatekeepers to assist in money
laundering in recent years?
A. The IMF has raised the profile of gatekeepers, requiring that countries regulate them B. Lawyers
who represent money launderers can more easily be prosecuted C. Accountants are no longer
considered gatekeepers, since they are not permitted to set up companies or trusts D. The FATF
recommendations cover lawyers performing financial transactions ✔Correct Answer-B
Which three are principles found in the document "Principles of information Exchange between
Financial Intelligence Units (FIUs)"?
A. The exchange of information between FIUs should take place as informally and as rapidly as
possible and with no prerequisites, while guaranteeing protection of privacy and confidentiality of
the shared data B. Differences in the definition of offenses that fall under the competence of FIUs
should be before free exchange of information takes place C. The Egmont principle of free exchange
of information at the FIU level should be possible on the basis of reciprocity, including spontaneous
exchange D. It should be possible for communication between FIUs to take place directly and without
intermediaries ✔Correct Answer-A,C,D
What are three risk factors a financial institution should examine with regard to a proposed new
product? A. The complexity of the product B. The need to verify the identification of the customer C.
,Whether the product is easily transferable D. Whether other financial institutions are marketing the
product ✔Correct Answer-A,B,C
In some instances, a financial institution may receive a warrant from law enforcement authorities to
search its premises. A search warrant is a grant of permission from a court for a law enforcement
agency to search certain designated premises and seize specific categories of items or information.
Generally, what is the required threshold for the requesting agency to establish in order to obtain a
search warrant of a financial institution?
A. Reasonable belief B. Probable cause C. A preponderance of the evidence D. Clear and Convincing
proof ✔Correct Answer-A
Which three characteristics make non-profit organizations vulnerable to misuse for terrorist
financing? A. Enjoying the public trust B. Having access to a considerable sources of funds C. Being
listed as government nonprofit organization D. Having a global presence for national and
international operations and financial transactions ✔Correct Answer-A, B, D
An anti-money laundering specialist at a financial institution has received a legal request to provide
all transaction records for a specific individual since 2004. Which three items should be delivered?
A. Monthly statements and transaction activities for that individual since 2004 B. All wire transfer for
that individual since 2004 C. All security trading activities for that individual since 2004 D. Signature
cards from accounts opened by that individual since 2004 ✔Correct Answer-A,B,C
How do payable through accounts (PTAs) differ from normal foreign correspondent accounts? A. The
customers do not have to worry about sanctions list screening such as OFAC B. The customers have
the ability to directly control funds at the correspondent bank C. The customers can contact the
correspondent bank directly to send wire transfers D. The customers can hide their identity through
the use of cover payments in U.S. dollars ✔Correct Answer-A
What is the term for trading through multiple accounts, where an individual generates offsetting
profits and losses and transfers of positions through accounts that do not appear to be commonly
controlled?
A. Ponzi scheme B. Market Manipulation C. Net Trading D. Wash Trading ✔Correct Answer-D
The Wolfsberg Principles for Private Banking list circumstances that would require additional due
diligence, including activities that involve which three of these choices? A. Foreign jurisdictions B.
High Risk Countries, including those identified by credible sources as having inadequate Anti-Money
Laundering standards C. High Risk activities, involving clients and beneficial owners whose source of
wealth originates from activities known to be vulnerable to money laundering D. Public officials,
including those individuals who have or had positions of public trust ✔Correct Answer-B,C,D
Which three are examples of best practices terms of ensuring an adequate AML program? A. Engage
an independent party to perform a periodic review of the program B. Review applicable domestic
and international AML guidance C. Perform a risk analysis on a regular basis and compare it to the
coverage of the AML program D. Review the accuracy of account opening applications ✔Correct
Answer-B,C,D
Which three statements are true regarding the extraterritorial reach of laws and legislation of the
U.S.? A. The criminal anti-money laundering law can apply to transactions that occur partially
overseas B. Economic and trade sanctions by OFAC may pose extraterritorial risks for financial
institutions and businesses outside the U.S. C. The extraterritorial reach covers all transactions
,throughout the global economy D. The defendant does not need to know the funds came from an
illegal activity under state, federal or foreign law ✔Correct Answer-A,B,D
What is a criterion for FATF membership? A. The country should be democracy B. The country should
be a member of a FATF-style regional body C. The country should have already implemented all of
the FATF Recommendations D. The country should have already implemented the standards of the
European Union Directives ✔Correct Answer-B
According to the Second European Union Money Laundering Directive, what may knowledge of
criminal conduct be inferred from? A. Subjective, factual circumstances B. Objective, factual
circumstances C. Objective, non-factual circumstances D. Subjective, non-factual circumstances
✔Correct Answer-B
In which type of banking transaction is price manipulation, as a form of money laundering, a
common practice?
A. Redeeming an annuity B. Sending a wire transfer C. Issuing a letter of credit D. Subscribing to a
cash management account ✔Correct Answer-C
Which two aspects of the security broker dealer industry increase its exposure to money laundering?
Choose 2 answers A. The routine use of wire transfers from, to or through multiple jurisdictions B.
They easy conversion of holdings to cash with significant loss of principal C. Disposing of cash
through securities purchases D. Fast paced transactions conducted electronically ✔Correct
Answer-C,D
To ensure that an institution's anti-money laundering program is current, which step should be
taken?
A. The program should be evaluated and updated at least every six months be the Board of Directors
B. The program should be reviews by a federal law enforcement officer for gaps in controls C. The
program should be sent to the institution's government regulator on a periodic basis D. The program
should be reassessed at least annually ✔Correct Answer-D
A prospective AML officer comes highly recommended by a bank's up-stream correspondent
institution of similar size and make-up, located in a different city in the same country. The bank is
interested in hiring the individual. What should be the next step taken by the Board of Directors? A.
Do a thorough background check B. Confer with its regulatory agency to determine whether it is
appropriate to hire the person C. Hire the individual, relying on the recommendation of its
correspondent D. Hire the individual on a probationary basis so that the institution can determine if
the individual is sufficiently experienced and capable ✔Correct Answer-A
Which type of transactions present the highest risk? A. Wire transfers from a publicly listed company
B. Payroll payments C. Social insurance payments D. Foreign exchanges ✔Correct Answer-D
According to experts, what is the most effective way to prevent money laundering through financial
institutions? A. ensuring that transaction monitoring systems can identify terrorist financing B.
collecting information on beneficial owners in foreign customers C. instituting a policy prohibiting the
acceptance of funds intended for terrorist financing D. implementing a sound customer due diligence
program ✔Correct Answer-D
What should a bank focus on to ensure ongoing compliance with its AML program? A. it should
ensure that it develops and provides ongoing targeted training of all current and new employees B. it
should subject all new employees to criminal background checks before being hired C. it should
, review and update its transaction monitoring system D. it should ensure that the regulators have
reviewed and have approved the banks AML program ✔Correct Answer-A
What should a compliance officer do during an ongoing investigation into a clients activities by a
competent authority? A. ensure communication with regulatory and law enforcement authorities is
conducted only through the board of directors B. communicate only in writing regulatory in law
enforcement authorities in line with applicable local laws C. communicate with regulatory and law
enforcement authorities in line with applicable local laws D only provide information that is
specifically and directly requested ✔Correct Answer-A
How can dealers in high value items be at risk for money laundering? A. the value of precious metals
such as gold and silver is constantly fluctuating B. carrying large amounts of Jens of high value is
physically easy C. paperwork is not required to ship precious metals and gems D. drug dealers prefer
cash to precious metals and Jim ✔Correct Answer-B
Which activity is most likely to facilitate money laundering through online systems with inadequate
controls A. conducting a large volume of transactions B. providing continuous worldwide access C.
conducting anonymous transactions D. conducting large value transaction ✔Correct Answer-B
In the FATF 40 recommendations the focus on AML efforts has been expanded beyond financial
institutions. which 3 businesses and or professions are covered? Choose 3 answers A. casinos when
customers engage in financial transactions equal to or above a designated threshold B. Real estate
agents when they are involved in transactions for clients concerning buying and selling properties C.
dealers in art when they engage in any cash transaction with a customer at or above a designated
threshold D. trust and company service providers ✔Correct Answer-B, C, D
When requested by law enforcement via legal process to provide records or documentation what
should the officers of financial institutions do? A. provide all records and documents the officer
believes would be pertinent to the law enforcement agent's investigation B. Refuse to provide any
records or documents until the agent narrows the scope of the request down to what he or she
actually needs C. Not act on the legal process until the bank officer has contact with the agent and
learns what the agent is investigating D. if there is no basis for contesting the requeat, provide what
is requested ✔Correct Answer-C
Which AML standards have force of law? A. standards as defined in the third European Union money
laundering directive B. standards as defined by the united nations C. standards as defined by world
bank/international monetary fund (IMF) D. 40 recommendations ✔Correct Answer-A
What are some red flags pertaining to potentially suspicious transactions by a customer? Choose 3
A. Having multiple addresses and/or moving frequently B. Having a commercial account with cash
deposits C. Have a common address with several other bank clients D. Having multiple individuals
use the ATM card connected with the account in different cities ✔Correct Answer-A, C, D
An anti-money laundering expert is hired by a new internet bank to assess the money laundering
threat to the bank. What is the most important recommendation for the expert to make given it is an
online bank?
A. The bank should limit the amount of money which can be processed per transaction B. The bank
should ensure that prospective new customers can be properly identified C. The bank should set up
automated programs to analyze transactions for money laundering activity D. The bank should
ensure that a firewall is set up to protect the transactions ✔Correct Answer-A
