EIF Exam 2

Under the new UBO directives, banks and financial institutions are obliged to identify any natural person who owns or controls an interest of ________ or more in a legal person

Banks anticipate 5% default for a year. This is considered as

A product can be recalled of non-compliance. This is categorized under

In which stage of money laundering would you classify the use of laundered funds to purchase high value assets and luxury items

All of the following mitigates Credit Risk, except one. Which one?

The act of reorienting a financial transaction to avoid a reporting requirement

Risk treatment by the banks to bring risk exposures to the level of risk appetite are done by

The CBUAE regulations to reduce leverage is by

Risk treatment by the banks that have high probability and high impact losses are done by

The Banking product or service, that is not vulnerable to Money Laundering

The structure of the compliance team within an organization depends on

Which is the only department of the bank where market risk originates?

The AML program has _______ pillars

This is one of the risk mitigation measures for credit risk

Fluctuation in currency value would expose the bank to

The levels of risk the bank is willing to expose themselves to are

Balance sheet risk is also known as

Banks creating money can be a destabilizing factor

The function of internal audit

The CAR (Capital Adequacy Ratio) calculation under Basel Norms is done by taking risk-weighted assets of

A bill of lading is

The institute Cargo Clause is known as

In this method of international trade settlement, the seller ships the goods to the buyer and then sends the documents through his bank to obtain payment from the buyer

In a letter of credit transaction, the ______ assures the seller that if the issuing bank does not pay, than this bank will pay

The LC used for regular shipment of the same commodity for the same importer is

The document certifying the country in which the product was manufactured is known as

In documentary collection the buyer is called

A new LC issued on the security of another LC is called

This is a demand for payment which the seller makes on the buyer

Acceptance of a Bill of Exchange means:

Which Incoterm is riskiest for the importer from the following:

In this method of settlement in international trade, the buyer faces the risk that the seller may not deliver the goods even though payment is assured

This is a record or evidence of transaction between exporter and importer

An irrevocable assurance given by bank to pay a fixed sum to the beneficiary non-performance of the applicant issued as per UAE law is called

This principle states that the documentary credit cannot be revoked even if relations between buyer and seller have been affected or that between the importer and issuing bank have been affected

Which of the following is not party to Documentary credit?

In a letter of credit, banks

Seller pays for carriage but risk passes to buyer before receipt of the goods by the buyer. Which incoterm?

In which method of settlement goods are shipped by the seller followed by dispatch of documents to the buyer directly; payment is made after receipt of goods

This letter of credit is meant to cover non-performance of applicants

A market which is essential platforms for trading securities like shares, bonds, and debentures

This market is known as New issuing market

Which of the following is not a function of financial markets?

The department that measures treasury accounting, overseeing the valuation and revaluation of financial assets and liabilities

Treasury departments are crucial for banks

This book comprises financial instruments actively traded for short-term profits. Instruments include securities, derivatives, and marketable instruments

Stock markets will be an example of

This ensures consolidated daily balances into a centralized system and funds are available for daily cash requirements

Treasury management helps a business to achieve

This involves planning, organization, and control of asset and liability portfolios

ALM stands for

A liquidity management approach which relies on historical data and assumptions for projected cash requirements and beneficial for organizations prioritizing a high-level overview

Which of the following is not an objective of cash management?

Which of the following is not a benefit of cash forecasting?

Assessing the interest rate sensitivity of assets and liabilities to identify potential mismatches is known as:

This instrument provides investors lending money and receive regular interest payments and principle at maturity

Assessing the impact of adverse exchange rate movements under different scenarios is known as:

Main objective of ALM is to ensure

The risk refers to the chance that bank may not be able to pay its depositers

Which of the following customers you may apply simplified due diligence on?

A bank must allocate required minimum capital for its credit risk, market risk and operational risk is part of Basel 2 Norms under

Operational risk is caused by all the following, except

Interest rate is the chance of loss to the bank due to fluctuation in interest rates on loans and deposits

Treasury department of the bank is the only department that can originate market risk

Money laundering is the act of hiding the source of illegal assets?

The purpose of the AML rules is to help detect and report illegal activity

Which of the following is not a type of credit risk?

A criminal used the proceeds of a crime to establish a retail chain; under which stage of money laundering would this be classified?

Banking compliance refers to the set of laws, regulations, rules, guidelines, policies, processes, and procedures that financial institutions must follow to ensure their business and all its related activities are legal, ethical, and secure.

All these are quantitative risk measurement methods, except

This risk refers to the chance that bank may not be paid by the borrower

Which of the following is not one of the stages of money laundering?

Which of the following banking products to be considered least risky for money laundering?

In calculating CAR (Capital Adequacy Ratio) it should include both on balance assets and off balance sheet assts.

In a structure of Trade transaction, where there are buyer, seller and a middle man; the best type of L/C can be used is

The Applicant is not a party to an LC

A Bill of Exchange is

Incoterms Provides buyers and sellers with standard terms that will guarantee the value of the goods if it has been damaged on transit.

In which method of settlement in international trade the seller has an assurance of payment from a bank before he ships the goods?

Legal document that clearly describes' the sold goods, and the amount due on the customer

What are the major risks faced by the buyer in respect of Advance payment mode of settlement?

Insurance policy will cover the risk of

What is major risk faced by the Seller in Documentary Collections ?

In this method of settlement in International Trade, the seller ships the goods to the buyer's country and then sends documents through a bank for collection of money. What is that method of settlement?

Which international rules to be used to issue Bank Demand Guarantees?

Which Incoterm, the seller has the responsibility to pay freight?

A foreign buyer intends to finance the exporter for the raw material required by him for the order. The buyer will request the banker to issue:

An Airway Bill is not a document of title

In a documentary credit the beneficiary will be entitled to be paid in accordance with the terms and conditions of the credit provided that

The commercial invoice is a legal document between the supplier and the customer that clearly describes' the goods

In transferable L/C, second beneficiary will present the documents to

This mode of settlement in LCs involves the Nominated bank?

After issuing the LC, the applicant becomes bankrupt What should the issuing bank do?

Expected losses can be calculated based on