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CQIB EXAM QUESTIONS AND ANSWERS
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CQIB EXAM QUESTIONS AND ANSWERS
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CQIB EXAM QUESTIONS AND ANSWERSMutually owned co-operative financial institutions offering benefits to members through
a trust-like structure" describes which type of Insurer/Fund Manager? - Answers-
Friendly Society
Which is the decision-making process of framing? - Answers- To remove the 'noise'
from an issue to allow us to see the problem for what it is
Under the RG271 what is the maximum timeframes for IDR response for a
Superannuation trustee complaints? - Answers- 45 days after receiving the complaint
In the second line of defence, the Risk and Control Functions include: - Answers- 1.
Provide guidance and direction
2. Review and challenge risk management processes
When recording all information about a particular ethical dilemma, it's essential to
critically analyse the value judgements being made by each person involved as they
record their version of events" What step of the five-step ethical decision model is this
statement referring to - Answers- Step One - Recognise
What does AFCA stand for? - Answers- Australian Financial Complaints Authority
What step in the 5 Step Process for Resolving Ethical Decisions is where you think
about the issue and write everything down? - Answers- Recognise
Which of the regulatory bodies is the "lender of last resort"? - Answers- Reserve Bank
of Australia
Under RG271 the maximum timeframe for Standard Complaint must be: - Answers- No
later than 30 calendar days after receiving the complaint
What is liquidity? - Answers- The Banks' ability to meet all expenses using only liquid
assets
The Competition and Consumer Act (2010) covers anti-competitive behaviour in which
of the following areas: - Answers- 1. Exclusive dealing
2. Collective bargaining
Which of the regulatory sought to improve executive accountability in ADI's? - Answers-
BEAR
Elliot works in the lending team at NAB. A client has come into the bank and is
threatening to take Elliot to court if he doesn't approve his home loan before the end of
the client's settlement period. What is the chief threat to Elliot acting professionally in
this matter? - Answers- Intimidation
,Stacey owns a hairdressing salon. Over the weekend, the store next door had a
chemical leak and Stacey and her team had to vacate the premises for a week and
couldn't work. Luckily, Stacey had insurance to cover her. What type of policy did she
rely on in this scenario? - Answers- Business interruption
Which of the document is not a Responsible Lending Disclosure Document? - Answers-
Product Disclosure Document
Which of the following describes the risk associated with the vulnerability of a line of
business to changes in the business environment? - Answers- Business risk
Who is NOT a price taker - Answers- 1. Banks and NBFI's
2. Brokers who act as intermediaries
What is the 5-step process for Ethical Dilemmas? - Answers- Recognise, facts,
Discuss, act, review
What is the four-step process to follow when handing customer complaints? - Answers-
Empathise, gather facts, solution, verify
Samuel explains that the XYZ savings booster account has a bonus interest rate and is
a good choice for customers who want a higher return on their account and do not need
to access their funds. What type of advice is Samuel providing? - Answers- General
advice
What is "Chinese walls" ? - Answers- Information barriers within the organisation to
prevent exchanges or communication lead to conflicts of interest
What is the role of the Reserve Bank of Australia (RBA)? - Answers- 1. Overall stability
of the financial system and regulation of the payments system
2. Monetary policy
What are the 4 types of Financial Markets? - Answers- Primary market, secondary
markets, exchange traded markets and over the counter markets
Luke works at the ABC Bank Call Centre. A customer asks about a new credit card, and
Luke informs a customer about the interest rate charged, the annual fee and the
rewards program. Luke is providing which of the following? - Answers- Factual
information
Banks & other NBFI's participate in the Financial markets as ______________ -
Answers- Price Makers
In which situations can a bank refuse to honour cheques? - Answers- 1. A garnishee
order is received
,2. The drawer of the cheque declares bankruptcy
Downtown bank collapses and files for bankruptcy. It is one of the major banks in its
country, and its collapse has serious negative impacts on the overall economy. This is
an example of which type of risk? - Answers- Macro-prudential risk
What are the four C's of Credit? - Answers- Character, Capacity, Collateral, Capital
The risk that problems arise in other internal business channels which could
compromise the financial and operational position of the ADI is referred to as what type
of Risk? - Answers- Contagion Risk
"Typically operated with a plastic card, mobile app or in a few cases by passbook" and
"level of interest rate varies depending on both the balance of the account and the terms
of the account" best describe which account type? - Answers- Savings
Basel II 2007 included: - Answers- Improvements to market discipline by requiring firms
to publish certain details of risks, capital and risk management
How many days prior to the policy renewal date must an insurer tell the policy holder
whether it is prepared to renew the contract? - Answers- 14
___________________ are the foundation of the Carroll's Social Responsibility Pyramid
- Answers- Economic Responsibilities
Is the bank the Mortgagee or Mortgagor - Answers- Mortgagee
What is underwriting? - Answers- the process by which an insurer determines whether
or not, and what basis, to accept a particular risk
Sarah has a $100,000 loan and chooses a fluctuating interest rate and the capacity to
make additional repayments over the life of the loan. What type of interest rate is Sara
applying to the loan? - Answers- Variable
What does ABA stand for and what is it used for? - Answers- Australian Bankers'
Association provides analysis, advice and advocacy for the banking industry and
contributes to the development of public policy on banking and other financial services.
What does ACCC stand for and what does it do? - Answers- The Australian
Competition and Consumer Commission (ACCC) is an independent authority of the
Australian government. Its mandate is to protect consumer rights, business rights and
obligations, perform industry regulation and price monitoring and prevent illegal anti-
competitive behaviour.
What does ACL stand for? - Answers- The Australian Consumer Law (ACL) includes
areas such as consumer rights when buying goods and services, contracts and
, unsolicited consumer agreements covering door to door sales and telephone sales. It is
administered by the ACCC.
What is ADI? Examples? - Answers- Authorised deposit-taking institution comprising
banks, credit unions and building societies.
What is advocacy threat? - Answers- A threat to independence that arises when an
individual is asked to consider an action or take a decision in relation to a person or
entity they have previously supported.
Who is AFCA? - Answers- The Australian Financial Complaints Authority (AFCA) is
scheduled to be introduced from July 2018 and designed as a one-stop-shop dispute
resolution scheme that will replace the SCT, CIO and FOS
What is AFSL? - Answers- The Australian Financial Services Licence (AFSL) is the
licence required to provide financial advice legally. Any organisation (or person),
including super funds, can't provide financial advice unless it holds an AFSL.
What is AML/CTF Act 2008 - Answers- The Anti-Money-Laundering and Counter
Terrorism Financing Act covers the financial sector, gambling sector, bullion dealers and
other professionals or businesses that provide services covered by the Act. The
AML/CTF Act is part of a legislative package which brings Australia into line with
international best practice to deter money laundering and terrorism financing.
What is Annuity? - Answers- An investment product through which a cash sum invested
provides a regular (usually fixed) income for life, (irrespective of how long the annuitant
lives) or a financial term specified at commencement.
What does APRA stand and responsible for? - Answers- Australian Prudential
Regulatory Authority responsibility for prudential supervision.
What does ASIC stand for and what does it protect? - Answers- Australian Securities
and Investments Commission having responsibility for market integrity and consumer
protection across the financial system.
What does AUSTRAC stand for and what does it protect? - Answers- The Australian
Transaction Reports and Analysis Centre administers the Anti-Money Laundering and
Counter-Terrorism Financing Act with the aim to keep Australia safe from financial and
other serious crime.
What is banking & finance oath? - Answers- The Banking and Finance Oath is founded
on a shared belief in the inherent 'good' of the banking and finance industry. The Oath is
an effort to improve the society by building trust and confidence in the industry.
What is business risk? - Answers- The risk associated with the vulnerability of a line of
business to changes in the business environment.
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