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Free IIA-CFSA-BANK Sample Questions:

Q: 1
Strategic Risk if not properly controlled, understood or measured may result in:
A. High Earnings volatility
B. Significant capital pressures
C. Withdrawal of loan portfolios by the customers
D. Only A&B
Answer: D

Q: 2
To limit strategic risk management should ensure proper balance between the:
A. Mortgage company's willingness to accept risk and its supporting resources and control
B. Internal operations and possibility of litigation
C. Managerial capacities and capabilities and delivery networks
D. All of these
Answer: A

Q: 3
In order to avoid reputation risk; e.g. a bank that originates and sells loans into the secondary market should follow ________ to protect its reputation in the market to support future loan sales.
A. Proper communication channels
B. Effective underwriting and documentation standards
C. Regulatory requirements
D. Disclosure requirements
Answer: B

Q: 4
When a bank charges off a loan as a loss, it reduces an account called the "________"
A. Lease payable
B. Lease Expense
C. Allowance of loans and lease losses
D. Prepaid loans and lease
Answer: C

Q: 5
Under the principles of bank accounting, loans reported as non-performing have not yet been charged off as ________.
A. Income
B. Expense
C. Losses
D. prepaid
Answer: C

Q: 6
Hospitals document reserves as that portion of the accounts receivables that they hope to collect
but have some doubt about its collectability. Rather than book these amounts as income, hospitals
will "________" These amounts until paid.
A. Bad debts
B. Reserve
C. Income expense
D. All (Allowance for loans and lease losses)
Answer: B

Q: 7
To the extent that the hedged relationship ceases to be effective, the hedging instrument's gains/losses should be transferred from the reserve and recognized in:
A. Assets
B. Receivables
C. Income
D. Expense
Answer: A

Q: 8
The process of purchasing all or any part of anew issue of municipal securities form the issuer and offering such securities for sale to investors is called:
A. Underwriting
B. Asset revaluation reserve
C. Hedging
D. None of These
Answer: A

Q: 9
For refinancing home and mortgage loans for example, the underwriter may request additional documentation such as:
A. Savings/source of money for down payment
B. Appraisal
C. Credit History
D. Only A&B
Answer: D

Q: 10
Once the underwriter has reviewed all of the file documentation provided, he or she will be issued a written decision .The decision may be one of the following:
A. Approved
B. Suspended
C. Denied
D. Any one of these
Answer: D

Q: 11
It provides additional living expenses when the home is unlivable, so home owners can continue to live comfortably. While the home is made livable, the homeowner policy will pay for items such as rented rooms at a hotel, restaurant meals, and laundry expenses. What is it?
A. Dwelling
B. Personal property
C. Loss of use
D. Medical coverage
Answer: C

Q: 12
Personal liability covers claims for bodily injury or property damage caused by the insured. And, Medical payment provides a low level of medical payment to help avoid legal action between the insured and the injured part, regardless of whether or not the insured is legally liable for the incident. These are two major types of liability coverage provided by:
A. Homeowner policies
B. Term insurances
C. Auto coverage policies
D. Casualty insurance policies
Answer: A

Q: 13
Foreign currency futures contracts may be legitimately traded either on a recognized futures exchange or in the ________, which generally involves trading between large institutions such as banks and corporations.
A. Secondary security market
B. Interbank market
C. Over the counter market
D. Dealers market
Answer: B

Q: 14
These occur when two parties trade currencies at a mutually agreed upon exchange rate. One trader calls another trader asking for the price of a particular currency, and the second trader quotes both buying and selling prices for that currency. What are these?
A. Spot transitions
B. Forward transitions
C. Backward transitions
D. None of these
Answer: A

Q: 15
Audits of foreign exchange transactions may include of the following objectives and tasks EXCEPT:
A. Determine whether internal controls over the authorization of transaction are adequate
B. Determine whether the valuation of transactions is properly calculated
C. Determine whether net assets, dividends, interest, and taxes are properly calculated and recorded
D. Determine that transactions are properly recorded on cash flow statement
Answer: D

Q: 16
Asset/liability management is a planning tool designed to maximize earnings. ALM tries to create optimal risk/reward decisions and focuses on creating prices that achieve a desired spread. A sound ALM policy must manage many types of risks such as:
A. Credit risk
B. Liquidity risk
C. Capital risk
D. All of these
Answer: D

Q: 17
The tax implications are to be considered in case of life insurance. As, you can take out in chunks to supplement the income, and minimize tax burden, while keeping the majority still under the tax differed status (Not to mention the benefit of Roth IRA).So, the end result of what you have is for disposable income is once again better with the:
A. 401K
B. Whole life Insurance
C. Term life Insurance
D. None of these
Answer: A

Q: 18
Main areas within financial services are:
A. Banking
B. Stock Exchange
C. Operations
D. All of these
Answer: B

Q: 19
Which one of the following Factors does NOT ensure the financial health and security of the organization?
A. Asset management and protection
B. Capital allocation management
C. Financial risk analysis and management
D. None of these
Answer: D

Q: 20
The companies strive to improve customer acquisition, services and retention through the use of following methods EXCEPT:
A. Market Analysis
B. Customer relationship management
C. One-to-one marketing
D. None of these
Answer: C

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