Certified Anti-Money Laundering Specialist (CAMS) Exam
Verified Questions, Correct Answers, and Detailed
Explanations for Computer Science Students||Already
Graded A+
1. Which of the following is the primary purpose of anti-money
laundering (AML) regulations?
A. To maximize bank profits
B. To detect and prevent illicit financial activities
C. To support investment strategies
D. To monitor customer satisfaction
Answer: B
Rationale: AML regulations are designed to detect and prevent the
flow of illicit funds through financial systems, reducing crime and
terrorism financing.
2. Which stage of money laundering involves placing illicit funds
into the financial system?
A. Layering
B. Integration
C. Placement
D. Structuring
Answer: C
Rationale: Placement is the initial stage where illegal funds are
introduced into the legitimate financial system.
3. The process of moving illicit funds through complex transactions
to obscure their origin is called:
A. Placement
B. Layering
,C. Integration
D. Smurfing
Answer: B
Rationale: Layering involves multiple transactions to disguise the
source of illicit funds.
4. The stage in which illicit funds are reintroduced into the
economy as seemingly legitimate funds is:
A. Placement
B. Integration
C. Structuring
D. Layering
Answer: B
Rationale: Integration allows laundered funds to appear legal,
completing the money laundering cycle.
5. Which of the following is considered a “suspicious activity” under
AML regulations?
A. A customer consistently depositing below reporting thresholds
B. Routine salary deposits
C. Automatic bill payments
D. Investment in government bonds
Answer: A
Rationale: Structuring transactions to avoid reporting thresholds is
considered suspicious under AML guidelines.
6. What does “KYC” stand for in AML compliance?
A. Know Your Customer
B. Keep Your Cash
,C. Know Your Corporation
D. Key Yearly Compliance
Answer: A
Rationale: Know Your Customer procedures ensure that financial
institutions verify the identity of their clients to prevent fraud and
money laundering.
7. Which of the following is a key component of an AML program?
A. Investment diversification
B. Employee bonuses
C. Customer due diligence (CDD)
D. Marketing campaigns
Answer: C
Rationale: CDD is essential for assessing and monitoring customers to
mitigate money laundering risks.
8. Which U.S. law requires financial institutions to report
transactions over $10,000?
A. Bank Secrecy Act (BSA)
B. Patriot Act
C. Dodd-Frank Act
D. Sarbanes-Oxley Act
Answer: A
Rationale: The Bank Secrecy Act mandates reporting of large cash
transactions to prevent money laundering.
9. A financial institution notices that a client’s activity is unusual
and potentially suspicious. What should the institution do?
A. Close the account immediately
, B. Report the activity through a Suspicious Activity Report (SAR)
C. Ignore it if the account balance is small
D. Call law enforcement directly
Answer: B
Rationale: Financial institutions are required to file SARs with
regulators when suspicious activity is detected.
10. Which of the following is NOT a typical red flag for money
laundering?
A. Unexplained large cash deposits
B. Frequent transfers to high-risk countries
C. Normal monthly salary deposits
D. Use of multiple accounts for small deposits
Answer: C
Rationale: Routine salary deposits are normal and generally not
considered suspicious.
11. “Smurfing” in money laundering refers to:
A. Rapidly converting illicit funds to cryptocurrency
B. Structuring deposits to avoid reporting requirements
C. Investing illicit funds in real estate
D. Laundering funds through a single bank
Answer: B
Rationale: Smurfing involves splitting large sums into smaller
transactions to avoid detection.
12. Customer due diligence (CDD) is primarily concerned with:
A. Marketing products to high-net-worth clients
B. Identifying and verifying the identity of clients
Verified Questions, Correct Answers, and Detailed
Explanations for Computer Science Students||Already
Graded A+
1. Which of the following is the primary purpose of anti-money
laundering (AML) regulations?
A. To maximize bank profits
B. To detect and prevent illicit financial activities
C. To support investment strategies
D. To monitor customer satisfaction
Answer: B
Rationale: AML regulations are designed to detect and prevent the
flow of illicit funds through financial systems, reducing crime and
terrorism financing.
2. Which stage of money laundering involves placing illicit funds
into the financial system?
A. Layering
B. Integration
C. Placement
D. Structuring
Answer: C
Rationale: Placement is the initial stage where illegal funds are
introduced into the legitimate financial system.
3. The process of moving illicit funds through complex transactions
to obscure their origin is called:
A. Placement
B. Layering
,C. Integration
D. Smurfing
Answer: B
Rationale: Layering involves multiple transactions to disguise the
source of illicit funds.
4. The stage in which illicit funds are reintroduced into the
economy as seemingly legitimate funds is:
A. Placement
B. Integration
C. Structuring
D. Layering
Answer: B
Rationale: Integration allows laundered funds to appear legal,
completing the money laundering cycle.
5. Which of the following is considered a “suspicious activity” under
AML regulations?
A. A customer consistently depositing below reporting thresholds
B. Routine salary deposits
C. Automatic bill payments
D. Investment in government bonds
Answer: A
Rationale: Structuring transactions to avoid reporting thresholds is
considered suspicious under AML guidelines.
6. What does “KYC” stand for in AML compliance?
A. Know Your Customer
B. Keep Your Cash
,C. Know Your Corporation
D. Key Yearly Compliance
Answer: A
Rationale: Know Your Customer procedures ensure that financial
institutions verify the identity of their clients to prevent fraud and
money laundering.
7. Which of the following is a key component of an AML program?
A. Investment diversification
B. Employee bonuses
C. Customer due diligence (CDD)
D. Marketing campaigns
Answer: C
Rationale: CDD is essential for assessing and monitoring customers to
mitigate money laundering risks.
8. Which U.S. law requires financial institutions to report
transactions over $10,000?
A. Bank Secrecy Act (BSA)
B. Patriot Act
C. Dodd-Frank Act
D. Sarbanes-Oxley Act
Answer: A
Rationale: The Bank Secrecy Act mandates reporting of large cash
transactions to prevent money laundering.
9. A financial institution notices that a client’s activity is unusual
and potentially suspicious. What should the institution do?
A. Close the account immediately
, B. Report the activity through a Suspicious Activity Report (SAR)
C. Ignore it if the account balance is small
D. Call law enforcement directly
Answer: B
Rationale: Financial institutions are required to file SARs with
regulators when suspicious activity is detected.
10. Which of the following is NOT a typical red flag for money
laundering?
A. Unexplained large cash deposits
B. Frequent transfers to high-risk countries
C. Normal monthly salary deposits
D. Use of multiple accounts for small deposits
Answer: C
Rationale: Routine salary deposits are normal and generally not
considered suspicious.
11. “Smurfing” in money laundering refers to:
A. Rapidly converting illicit funds to cryptocurrency
B. Structuring deposits to avoid reporting requirements
C. Investing illicit funds in real estate
D. Laundering funds through a single bank
Answer: B
Rationale: Smurfing involves splitting large sums into smaller
transactions to avoid detection.
12. Customer due diligence (CDD) is primarily concerned with:
A. Marketing products to high-net-worth clients
B. Identifying and verifying the identity of clients
