CACS (Client Advisor Competency Standards) Paper 1 Trial Questions Test
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CACS Paper 1 Trial Questions consist of trial questions based on the Client Advisor Competency Standards Examination. This Trial Question Mock Exam consists of 21 questions based on the IBF's Client Advisor Competency Standards book.
- 1.Who is/are deem as a Covered Person(s)?
- A.
Relation Manager
- B.
Investment Consultant and Product Specialist
- C.
Team Leader of Relationship Manager
- D.
D. Relationship Manager, Investment Consultant, Product Specialist, Assistant Relationship Manager and Team Leader
- 2.Which of the following statements on MAS Guideline on Fit and Proper Criteria is true?
- A.
The failure of a Covered Person to meet the “fit and proper” criteria set out in the Guideline may not lead to an automatic revocation of the status of an “appointed representative”
- B.
The failure of a Covered Person to meet the “fit and proper” criteria set out in the Guideline will lead to an automatic revocation of the status of an “appointed representative”
- C.
The Guideline are only statement of best practice and there is no adverse consequence if a Covered Person does not meet the “fit and proper” criteria
- D.
A Covered Entity has no duty to report to the MAS if any of its Covered Person fails to satisfy the Guideline as long as the Covered Entity deals with the non-compliant act based on its internal policies
- 3.What is the main difference between a wholesale and an offshore bank?
- A.
A wholesale bank can accept fixed deposits of at least S$250,000 from both residents and non-residents of Singapore but an offshore bank can accept fixed deposits of at least S$250,000 only from non-resident of Singapore
- B.
A wholesale bank can accept fixed deposits of at least S$250,000 from only residents of Singapore but an offshore bank can accept fixed deposits of at least S$250,000 from both residents and non-resident of Singapore
- C.
A wholesale bank can accept S$ fixed deposits of any amount from both residents and non-residents of Singapore but an offshore bank can only accept fixed deposits of at least S$250,000 non-resident of Singapore
- D.
Both wholesale and offshore banks are subject to restrictions when dealing in S$. There is no difference between them
- 4.Which of the following regarding marketing materials are true? I) marketing materials such as product brochures are typically reviewed and approved by the Covered Entity’s legal and compliance department before they are circulated for use by the Covered PersonII) other than the marketing materials approved by the Bank, Covered Persons can prepare their own marketing materials to assist their customers to understand the productsIII) obsolete marketing materials could still be used as long as the clients have been verbally informed of the updated information IV) email communications with clients are not deemed as marketing materials
- A.
I only
- B.
I, II and III
- C.
II and IV
- D.
None of the above
- 5.Which of the following about introducing activities is false?
- A.
The introducer refers clients to an appointed representative of the Covered Entity
- B.
The introducer provides factual information about investment products to the clients
- C.
The introducer provides advice on investment products to the clients
- D.
The introducer adheres to the script provided by the Covered Entity when carrying out introducing activities
- 6.Which of the following regarding cross-border activities are true? I) as long as the Covered Entity and Covered Person are licensed in Singapore to offer financial advisory services, they are allowed to conduct similar activities in other countriesII) a Covered Person should consult his legal and compliance department for guidance on the “dos” and don’ts” when conducting cross-border activitiesIII) cross-border activities include providing account-opening documentation or account statements to clients in another countryIV) cross-border activities may trigger local licensing or regulatory requirements in the countries where these activities are undertaken
- A.
I and II
- B.
II and III
- C.
II, III and IV
- D.
I and III
- 7.What is/are the objective(s) for gathering a client’s non-financial personal/family information?I) to have proper identification of the individual beneficial owner and account holderII) to understand the segmentation of primary and secondary client relationships within the family in order to determine who the key decision makers of the family areIII) so that the Covered Persons will know what gifts to get for the clients and their family members on social occasionsIV) to appreciate the evolving individual/family values and social behavior that shapes the hierarchy and various personal relationships of family members, for the purpose of supporting family wealth succession and continuity
- A.
All of the above
- B.
II only
- C.
I and II
- D.
I, II and III
- 8.What are the requirements the Covered Entity and Covered Person must comply with when executing a cross-border wire transfer for their customer?
- A.
Identify the wire transfer originator and verify his identity as well as record adequate details of the wire transfer so as to permit its reconstruction
- B.
The Covered Entity cannot include the customer’s personal details in the payment instruction even with the customer’s consent as this will be a breach of Section 47 of the Banking Act
- C.
There are no regulatory requirements when executing a cross-border wire transfer with a value of less than S$10,000
- D.
The Covered Entity, which is an ordering institution in a cross-border wire transfer, is only required to include the name of the remitter in the payment instruction for a transfer amount that exceeds $S2,000
- 9.Which of the following statement is true?
- A.
Only commercial banks are required to comply with MAS Notice 626 on the Prevention of Money Laundering is only Countering the Financing of Terrorism
- B.
Customer Due Diligence is only required to be performed for the customer and not their beneficial owners
- C.
Customer Due Diligence is only required to be performed for on-boarding new customer. Once the business relationship has been established, there is no requirement to perform on-going Customer Due Diligence
- D.
Additional KYC requirements have to be applied when dealing with Politically Exposed Persons
- 10.What should a Covered Person take into consideration when providing recommendations for an investment product to clients?
- A.
The amount of commissions the product would generate for the bank and for the Covered Person
- B.
The client’s financial objectives, risk tolerance, financial situation and current investment portfolio
- C.
Products which offer rebates to clients
- D.
The networth of the client
- 11.When describing dual currency investment in any marketing material materials and/or product disclosure statements, which of the following information must be made available? I) Dual currency investment is a structured depositII) Nature and mechanics of dual currency investmentIII) Appropriate risk warningsIV) Appropriate illustrations to show how foreign exchange rate movements could result in the principal amount being repaid in the alternate currency, which could in turn result in the client receiving less than the principal amount initial invested when the amount in the alternate currency is converted back to the base currency
- A.
All of the above
- B.
II, III and IV
- C.
II and III
- D.
II and IV
- 12.Which of the following statement(s) is/are true with respect to providing recommendations on structured deposits?I) Representatives should explain to the investors that structured deposits are the same as normal fixed deposits since investors will receive the full principal amount upon maturity.II) Some clients may not require any recommendation from a Financial Adviser (FA) of its representatives on their selection of a structured deposit. In such cases, appropriate warnings should be made to such clients highlighting that they may wish to seek advice from a FA before making a commitmentIII) Disclose the benefits that are likely to be derived from the structured deposit, the amount and timing for benefits and whether the benefits are guaranteed or non-guaranteed. Benefits payable in the case of early redemption by the deposit taking institution should be clearly disclosedIV) Structured deposit is an insured deposit
- A.
All of the above
- B.
II and III
- C.
II only
- D.
IV only
- 13.When must the Covered Entity send the contract note to the client?
- A.
Not later than the business day immediately following the sale of the shares
- B.
As soon as practicable
- C.
No later than 7 calendar days immediately following the sale of the shares
- D.
No later than 3 calendar days immediately following the sale of the shares
- 14.When selling an unlisted debenture, which of the following should be disclosed and explained to investor? I) The time frame for the investor to reconsider his purchaseII) The terms and procedures for exercising his right to cancel his purchaseIII) The risk of any fall in value of the unlisted debenture during the cancellation period would have to be borne by the clientIV) No disclosure is required
- A.
IV only
- B.
I and II
- C.
I, II and III
- D.
I and III
- 15.When executing securities transactions for client, which of the following should a Covered Entity / Cover Person comply with? I) The Covered Entity and Covered Person should not withhold or withdraw a client’s order from the market for the benefit of the Covered Entity / Covered PersonII) The Covered Person must give priority to the client’s outstanding orders over his own tradesIII) The Covered Entity must provide a contract note to the clientIV) The Covered Entity must act as the principal to these trades
- A.
I, II and III
- B.
I and II
- C.
I, II and IV
- D.
All of the above
- 16.Under the MAS Notice on Misconduct of Representative, Cover Entities are required to report which of the following types of misconduct committed by the Cover Person? I) Act involving fraud and DishonestyII) Acts involving inappropriate advice, misrepresentation or inadequate disclosure of informationIII) A serious breach of the Covered Entities’ internal policy or code of conductIV) The failure to meet the continuing education requirement
- A.
I, II and III
- B.
I and II
- C.
I, II and IV
- D.
All of the above
- 17.Under which of the following circumstance are the Covered Entities and Covered Persons allowed to disclose any information given by a client? I) When the client has given his consent to the Covered Entity to disclose the informationII) When the information is disclosed to the spouse of the clientIII) When the information is disclosed to the MAS in accordance with the provisions in the Banking ActIV) No disclosure is allowed
- A.
IV only
- B.
I, II and III
- C.
I and III
- D.
I only
- 18.Which of the following statement is false?
- A.
A covered Entity should implement and maintain proper procedures to preserve the confidentiality of any information it receives from a client
- B.
A covered Entity should have in place adequate procedures and processes for handling complaints
- C.
When a misconduct has been committed by a Covered Person, the Covered Entity has to report the misconduct to MAS no later than 21 days after the discovery of the misconduct
- D.
A Covered Entity has to ensure that its Covered Persons meets continuing education requirements
- 19.Where is the trust resident?
- A.
Singapore because this is stated in the trust document
- B.
Indonesia because your client is an Indonesian citizen
- C.
It depends on where the wife and children and domiciled
- D.
Singapore because all the assets in the trust are in Singapore
- 20.Your client wants to be involved in the decision making and have a final say in the investment and distribution of the trust assets. What would you advise your client?
- A.
Inform the client that this is not possible as only appointed trustee can have a say in the investment and distribution of the trust assets
- B.
The client can state in his letter of wishes that he wishes to be consulted on all appointments and distributions. Also, the terms of the trust can provide for a protector and your client can be appointed as the protector
- C.
Inform the client that a Singapore Trust does not allow for the settler to reserve full investment power for himself
- D.
The client can be appointed as the protector to be consulted on matters relating to the investment of the trust. However, the final decision rests with the appointed trustee
- 21.Your client informed you that both he and his business partner are worried that the business might be affected should any one of them pass away. Which of the following might be a possible solution to this concern?
- A.
Purchase life insurance policy to protect against the financial loss. The death benefit payout from the policy could be used to fund operating cash flow needs
- B.
Establish a vista Trust
- C.
Establish a Business Continuity Plan
- D.
Buy a term life policy as the policy can be surrendered at any time and the cash value can be used to fund operating cash flow needs
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