IIA IIA Certifications IIA-CFSA Questions & Answers

• Question 131:

  CAMEL is an acronym that comes from the key areas of a financial institution's safety and soundness examination. It stands for:

  A. Capital adequacy, Asset Quality, Management, Earning and Liquidity

  B. Credit Rating, Asset management, Employee turnover and liabilities

  C. Capital adequacy, Asset management, Earning and liabilities

  D. None of these

  Correct Answer: A

• Question 132:

  The primary regulatory entities for banking include all EXCEPT:

  A. Federal Reserve System

  B. Office of the comptroller of currency

  C. State Regulatory System

  D. ALM union (Asset/Liabilities management union)

  Correct Answer: D

• Question 133:

  Federal Reserve Board has:

  A. Monetary policy

  B. Regulatory responsibilities

  C. Supervisory responsibilities

  D. All of these

  Correct Answer: D

• Question 134:

  ___________ supervise domestic and international activities of national banks and perform corporate analysis.

  A. National bank Examiners

  B. National banks project directors

  C. Subcontractors of Government entities

  D. None of these

  Correct Answer: A

• Question 135:

  ____________ is a form of insurance, to move risk from someone major loss to someone who could absorb the loss, or is able to hedge against the risk by buying some other derivative.

  A. Future

  B. Option

  C. Swap

  D. All the derivatives

  Correct Answer: D

• Question 136:

  The Federal Reserve issue oral or written statement to encourage banks to increase or decrease their lending activities. This is a condition of:

  A. Moral Suasion

  B. Change in discount rate

  C. Situation prior to inflation

  D. None of these

  Correct Answer: A

• Question 137:

  A sound Asset/Liability management policy must manage following risk EXCEPT:

  A. Credit Risk

  B. Capital Risk

  C. Interest-Rate risk

  D. None of these

  Correct Answer: D

• Question 138:

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

  A. Future contracts

  B. Interest rate swap

  C. Option

  D. Forward contracts

  Correct Answer: B

• Question 139:

  Which of the following would not generally be a responsibility of an underwriting department?

  A. Helping policy owners with requests for information, interpreting policy language,answering questions regarding policy coverage

  B. Verifying that the mortality/morbidity rates of the company's insurers do not exceed the rates assumed when the premiums were calculated

  C. Considering the applicant's age, weight, physical condition, personal/family history, andother factors to determine the degree of risk

  D. Negotiating and managing reinsurance agreements.

  Correct Answer: A

• Question 140:

  Which statement is correct concerning commercial letters of credit?

  A. A letter of credit is not a negotiable instrument, and the contract of sale between the buyer and seller is independent of the letter of credit

  B. A letter of credit is not a negotiable instrument, and the contract of sale between the buyer and seller is dependent of the letter of credit

  C. A letter of credit is a negotiable instrument, and the contract of sale between the buyer and seller is independent of the letter of credit

  D. A letter of credit is a negotiable instrument, and the contract of sale between the buyer and seller is dependent on the letter of credit

  Correct Answer: B