Question 1

The primary objective/s of ECB is/are:

Accepted Answer

A)  To maintain price stability 
B)  To support the general economic policies in the community with a view to contributing to the achievement of the objectives of the community 
C)  To achieve a high level of employment and sustainable and non-inflationary growth 
D)  None of these 
A)  To maintain price stability 
B)  To support the general economic policies in the community with a view to contributing to the achievement of the objectives of the community 
C)  To achieve a high level of employment and sustainable and non-inflationary growth 
D)  None of these A

Question 2

Preferred stock is similar to common stock in that it represents ownership in a corporation. Preferred stockholders generally receive as fixed dividend rate. The types of preferred stock include all of the following EXCEPT:

Accepted Answer

A)  Cumulative preferred stock 
B)  Non-cumulative preferred stock 
C)  Participating preferred stock 
D)  Invertible preferred stock 
A)  Cumulative preferred stock 
B)  Non-cumulative preferred stock 
C)  Participating preferred stock 
D)  Invertible preferred stock D

Question 3

Commercial, residential and consumer are three basic types of:

Accepted Answer

A)  Short term working capital loans 
B)  Asset-based financing 
C)  Installment loans 
D)  Loans 
A)  Short term working capital loans 
B)  Asset-based financing 
C)  Installment loans 
D)  Loans D

Question 4

Example/s of ongoing monitoring function/s is/are:

Accepted Answer

A)  Management's review of performance reports and comparing them to the budgets and other benchmarks 
B)  Feedback obtained from external parties (e.g. complaints from stake holders) 
C)  Direct supervision and review of work by functional level managers 
D)  All of above 
A)  Management's review of performance reports and comparing them to the budgets and other benchmarks 
B)  Feedback obtained from external parties (e.g. complaints from stake holders) 
C)  Direct supervision and review of work by functional level managers 
D)  All of above

Question 5

A contract whereby one undertakes to indemnify another or pay a specified amount upon determinable contingencies is called:

Accepted Answer

A)  Demand draft 
B)  Loan 
C)  Insurance 
D)  Term deposit 
A)  Demand draft 
B)  Loan 
C)  Insurance 
D)  Term deposit

Question 6

Which of the following should be the next step after the structuring process in order to complete the securitization process?

Accepted Answer

A)  Credit management 
B)  Credit operations 
C)  Credit Enhancement 
D)  Credit deployment 
A)  Credit management 
B)  Credit operations 
C)  Credit Enhancement 
D)  Credit deployment

Question 7

Variable life insurance is:

Accepted Answer

A)  Permanent life insurance 
B)  Temporary life insurance 
C)  Flexible life insurance 
D)  None of these 
A)  Permanent life insurance 
B)  Temporary life insurance 
C)  Flexible life insurance 
D)  None of these

Question 8

A derivative with a convex payoff-profile at some point before the option's maturity is a simple plan vanilla option. As the option becomes progressively more-in-the money, the rate at which the position makes money increases until a sympathetically approaches the linear payoff of the future. Similarly, as the option becomes progressively more out-of - the money, the rate at which the position loses money decreases until that rate becomes zero. This is an example of:

Accepted Answer

A)  Spot rate 
B)  Non linear derivate 
C)  Linear derivate 
D)  None of these 
A)  Spot rate 
B)  Non linear derivate 
C)  Linear derivate 
D)  None of these

Question 9

An intelligent risks management platform approaches risk from the:

Accepted Answer

A)  Higher level 
B)  Moderate level 
C)  Low/ operational level 
D)  Both A and B as it depends 
A)  Higher level 
B)  Moderate level 
C)  Low/ operational level 
D)  Both A and B as it depends

Question 10

When one party trades a variable interest rate for a fixed interest rate or vice versa then __________ occurs.

Accepted Answer

A)  Future contracts 
B)  Interest rate swap 
C)  Option 
D)  Forward contracts 
A)  Future contracts 
B)  Interest rate swap 
C)  Option 
D)  Forward contracts

Question 11

In option- type securities contracts the option's price is called:

Accepted Answer

A)  Mark up 
B)  Premium 
C)  Return value 
D)  Both A&B 
A)  Mark up 
B)  Premium 
C)  Return value 
D)  Both A&B

Question 12

Banks can record interest earned on trading securities as either interest income or trading income. However, the recommended method is:

Accepted Answer

A)  To report interest income separately from trading income if the amount is material 
B)  To report interest income with trading income if the amount is material 
C)  To report interest income separately from trading income if the amount is not material 
D)  To report interest income with trading income if the amount is not material 
A)  To report interest income separately from trading income if the amount is material 
B)  To report interest income with trading income if the amount is material 
C)  To report interest income separately from trading income if the amount is not material 
D)  To report interest income with trading income if the amount is not material

Question 13

All these statements elaborate purpose of standards EXCEPT:

Accepted Answer

A)  Foster improved organizational processes and operations 
B)  Establish the basis for the evaluation of internal audit performance 
C)  Subvert the framework for performing and promoting broad range of value-added internal audit activities. 
D)  Delineate basic principles that represent the practice of internal auditing as it should be 
A)  Foster improved organizational processes and operations 
B)  Establish the basis for the evaluation of internal audit performance 
C)  Subvert the framework for performing and promoting broad range of value-added internal audit activities. 
D)  Delineate basic principles that represent the practice of internal auditing as it should be

Question 14

Auditors should be aware that the investment objectives of a mutual fund are usually based on a risk profile outlined in the fund prospectus. For example, aggressive growth funds may invest in highly volatile stock issues and a money market fund may invest in lo -risk money market instruments. Other funds have investment objectives based on the type or location of companies they invest in, such as:

Accepted Answer

A)  Funds that invest only in non-profit organizations 
B)  Funds that invest only in environmentally conscious companies 
C)  Funds that invest only in U.S. government organizations 
D)  None of these 
A)  Funds that invest only in non-profit organizations 
B)  Funds that invest only in environmentally conscious companies 
C)  Funds that invest only in U.S. government organizations 
D)  None of these

Question 15

Insurance Brokers work for:

Accepted Answer

A)  Insured and insurance company 
B)  Insured rather than an insurance company 
C)  Brokerage houses 
D)  None of them 
A)  Insured and insurance company 
B)  Insured rather than an insurance company 
C)  Brokerage houses 
D)  None of them

Question 16

In which of the following ways are calls and put options used by the options investor in purchase and sales transaction?

Accepted Answer

A)  A long call allows the investor to purchase the underlying security at the specified strike price after the option expiration date II. Along put allows the investor to sell the underlying security at the specified strike price until the option expiration date III. An investor who is short a call is at the underlying security at the specified strike price if a call option is exercised after the option expiration date IV. An investor who is short a put is obligated to buy the underlying security at the specified strike price if a put option is exercised by the option expiration date 
B)  I and II only 
C)  I and III only 
D)  II and III only 
E)  II and IV only 
A)  A long call allows the investor to purchase the underlying security at the specified strike price after the option expiration date II. Along put allows the investor to sell the underlying security at the specified strike price until the option expiration date III. An investor who is short a call is at the underlying security at the specified strike price if a call option is exercised after the option expiration date IV. An investor who is short a put is obligated to buy the underlying security at the specified strike price if a put option is exercised by the option expiration date 
B)  I and II only 
C)  I and III only 
D)  II and III only 
E)  II and IV only

Question 17

Trust departments provide services to publicly held companies related to issuing and maintaining:

Accepted Answer

A)  Stock transactions 
B)  Stock balances 
C)  Stock threshold 
D)  None off these 
A)  Stock transactions 
B)  Stock balances 
C)  Stock threshold 
D)  None off these

Question 18

Recent turmoil in the financial markets illustrate the volatility of the secondary market for subprime loans and the significant liquidity risk incurred when originating a large volume of loans intended for:

Accepted Answer

A)  IPO 
B)  Securitization and sale 
C)  Loans 
D)  All of these 
A)  IPO 
B)  Securitization and sale 
C)  Loans 
D)  All of these

Question 19

Which one of the following is NOT the rule of National Association of Securities Dealers (NASD)?

Accepted Answer

A)  All correspondence and all transactions must be reviewed and approved by the firm and maintained for three years. 
B)  Disciplinary actions regarding employees must be reported to NASD. 
C)  Firms do not need to maintain fidelity bond to protect against losses due to theft or misappropriation of securities 
D)  None of these. 
A)  All correspondence and all transactions must be reviewed and approved by the firm and maintained for three years. 
B)  Disciplinary actions regarding employees must be reported to NASD. 
C)  Firms do not need to maintain fidelity bond to protect against losses due to theft or misappropriation of securities 
D)  None of these.

Question 20

Insurance products yield _________ compared to regular investment option and this is besides the added incentives (read bonuses) offered by insurers.

Accepted Answer

A)  More 
B)  Less 
C)  Almost the same 
D)  It depends 
A)  More 
B)  Less 
C)  Almost the same 
D)  It depends

The primary objective/s of ECB is/are:

Preferred stock is similar to common stock in that it represents ownership in a corporation. Preferred stockholders generally receive as fixed dividend rate. The types of preferred stock include all of the following EXCEPT:

Commercial, residential and consumer are three basic types of:

Example/s of ongoing monitoring function/s is/are:

A contract whereby one undertakes to indemnify another or pay a specified amount upon determinable contingencies is called:

Which of the following should be the next step after the structuring process in order to complete the securitization process?

Variable life insurance is:

An intelligent risks management platform approaches risk from the:

When one party trades a variable interest rate for a fixed interest rate or vice versa then __________ occurs.

In option- type securities contracts the option's price is called:

Banks can record interest earned on trading securities as either interest income or trading income. However, the recommended method is:

All these statements elaborate purpose of standards EXCEPT:

Insurance Brokers work for:

In which of the following ways are calls and put options used by the options investor in purchase and sales transaction?

Trust departments provide services to publicly held companies related to issuing and maintaining:

Recent turmoil in the financial markets illustrate the volatility of the secondary market for subprime loans and the significant liquidity risk incurred when originating a large volume of loans intended for:

Which one of the following is NOT the rule of National Association of Securities Dealers (NASD)?

Insurance products yield _________ compared to regular investment option and this is besides the added incentives (read bonuses) offered by insurers.

Certified Government Auditing Professional

The Internal Audit Activity Role in Governance, Risk, and Control

Conducting the Internal Audit Engagement

Business Analysis and Information Technology

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Exam 1: Certified Financial Services Auditor

The primary objective/s of ECB is/are:

Preferred stock is similar to common stock in that it represents ownership in a corporation. Preferred stockholders generally receive as fixed dividend rate. The types of preferred stock include all of the following EXCEPT:

Commercial, residential and consumer are three basic types of:

Example/s of ongoing monitoring function/s is/are:

A contract whereby one undertakes to indemnify another or pay a specified amount upon determinable contingencies is called:

Which of the following should be the next step after the structuring process in order to complete the securitization process?

Variable life insurance is:

An intelligent risks management platform approaches risk from the:

When one party trades a variable interest rate for a fixed interest rate or vice versa then __________ occurs.

In option- type securities contracts the option's price is called:

Banks can record interest earned on trading securities as either interest income or trading income. However, the recommended method is:

All these statements elaborate purpose of standards EXCEPT:

Insurance Brokers work for:

In which of the following ways are calls and put options used by the options investor in purchase and sales transaction?

Trust departments provide services to publicly held companies related to issuing and maintaining:

Recent turmoil in the financial markets illustrate the volatility of the secondary market for subprime loans and the significant liquidity risk incurred when originating a large volume of loans intended for:

Which one of the following is NOT the rule of National Association of Securities Dealers (NASD)?

Insurance products yield _________ compared to regular investment option and this is besides the added incentives (read bonuses) offered by insurers.

Certified Government Auditing Professional

The Internal Audit Activity Role in Governance, Risk, and Control

Conducting the Internal Audit Engagement

Business Analysis and Information Technology

Filters