A Conflict Of Interest (Coi) Quiz

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| By Sheilamstrong
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Sheilamstrong
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Quizzes Created: 4 | Total Attempts: 4,691
Questions: 10 | Attempts: 2,165

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A Conflict Of Interest (Coi) Quiz - Quiz

A conflict of interest is a situation in which the interests of parties collide. Take this multiple choice questions-based quiz and know more. What is your definition of a conflict of interest? This quiz will certainly broaden your understanding. The informative quiz contains various theoretical and application-based questions that will help you learn more about it. Share the quiz with your friends and family if you find it helpful. All the best!


Questions and Answers
  • 1. 

    An employee is prohibited from being directly or indirectly involved in the origination, processing, underwriting, closing or funding of a mortgage loan for the following family member(s) - check all that apply:

    • A.

      Mother/Mother-in-Law

    • B.

      Father/Father-in-Law

    • C.

      Brother/Sister

    • D.

      Daughter/Step-Daughter

    • E.

      Son/Step-Son

    • F.

      Grandparent

    • G.

      Grandchild

    • H.

      Spouse

    Correct Answer(s)
    A. Mother/Mother-in-Law
    B. Father/Father-in-Law
    C. Brother/Sister
    D. Daughter/Step-Daughter
    E. Son/Step-Son
    F. Grandparent
    G. Grandchild
    H. Spouse
    Explanation
    The employee is prohibited from being involved in the origination, processing, underwriting, closing, or funding of a mortgage loan for all the listed family members. This includes the employee's mother/mother-in-law, father/father-in-law, brother/sister, daughter/step-daughter, son/step-son, grandparent, grandchild, and spouse.

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  • 2. 

    An employee can work on his or her own loan, as long as his or her name does not appear on any of the documents in the file.

    • A.

      True

    • B.

      False

    Correct Answer
    B. False
    Explanation
    This statement is false because an employee should not work on their own loan, even if their name does not appear on any of the documents in the file. It is a conflict of interest and can lead to biased decisions or unethical practices. It is important to maintain a separation between personal and professional responsibilities to ensure fairness and integrity in the workplace.

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  • 3. 

    Which of the following instances represent a conflict of interest that would prohibit the employee from being involved in the origination, processing, underwriting, closing, or funding of the transaction?

    • A.

      The employee is the seller for a borrower's purchase mortgage.

    • B.

      The employee resides with the borrower.

    • C.

      The employee has financial interest in the transaction.

    • D.

      All of the Above

    Correct Answer
    D. All of the Above
    Explanation
    All of the instances mentioned in the options represent a conflict of interest that would prohibit the employee from being involved in the origination, processing, underwriting, closing, or funding of the transaction. Being the seller for a borrower's purchase mortgage, residing with the borrower, and having a financial interest in the transaction can all create biased or unethical situations where the employee's personal interests may influence their decision-making process, potentially leading to unfair treatment or compromised integrity in the transaction.

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  • 4. 

    When a Loan Officer wishes to obtain a mortgage loan for themselves, which of the following procedures is correct?

    • A.

      The Loan Officer may input the application into the LOS, but may not pull credit and must list another licensed Loan Officer as the Loan Officer of record.

    • B.

      The Loan Officer may input the application into the LOS, may pull credit, but then must have the processor complete the required documentation and disclosures.

    • C.

      The Loan Officer may not originate the loan either directly or indirectly and must submit an application to any other licensed Loan Officer in the company.

    • D.

      The Loan Officer may pull credit, but must provide the application to another licensed Loan Officer for input into the LOS.

    Correct Answer
    C. The Loan Officer may not originate the loan either directly or indirectly and must submit an application to any other licensed Loan Officer in the company.
    Explanation
    The correct answer is that the Loan Officer may not originate the loan either directly or indirectly and must submit an application to any other licensed Loan Officer in the company. This means that the Loan Officer cannot handle the loan process for themselves and must pass it on to another licensed Loan Officer within the company. This ensures that there is no conflict of interest and maintains the integrity of the loan process.

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  • 5. 

    An employee may upload supporting documents for their own transaction into the LOS system, providing they do not input any data into the LOS for their loan.

    • A.

      True

    • B.

      False

    Correct Answer
    B. False
    Explanation
    Employees should not upload supporting documents for their own transaction into the LOS system, even if they do not input any data into the LOS for their loan. This is because it can create a conflict of interest or potential bias in the loan approval process. It is important to maintain a separation of duties and ensure that all transactions are handled by individuals who are not directly involved in the loan.

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  • 6. 

    The following are the ways that the Research Oversight Committee is involved in the conflict of interest procedure:

    • A.

      As determined by the ROC Chair and Co-Chair, serves as the Conflict of Interest Committee for the review and approval of SFI's > $40K

    • B.

      For SFIs over $40K, ROC evaluates and decides on management plan edits.

    • C.

      To offer opinions and influence on research

    • D.

      To offer opinions and influence on research

    Correct Answer
    A. As determined by the ROC Chair and Co-Chair, serves as the Conflict of Interest Committee for the review and approval of SFI's > $40K
    Explanation
    The Research Oversight Committee (ROC) plays a crucial role in the conflict of interest procedure by serving as the Conflict of Interest Committee for the review and approval of SFI's (Significant Financial Interests) that exceed $40K. This means that the ROC, under the guidance of the Chair and Co-Chair, is responsible for evaluating and deciding on the management plan edits for SFIs that exceed this threshold. By doing so, the ROC ensures transparency and accountability in managing potential conflicts of interest within the research process.

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  • 7. 

    Which of the following statements regarding a profession's code of ethics is most accurate? 

    • A.

      A code of ethics makes sure that all members of a profession act ethically at all times.

    • B.

      A code of ethics communicates the principles and expected behavior of a profession's members.

    • C.

      A code of ethics always includes standards of conduct.

    • D.

      None of the above

    Correct Answer
    B. A code of ethics communicates the principles and expected behavior of a profession's members.
    Explanation
    A code of ethics communicates the principles and expected behavior of a profession's members. This means that the code of ethics outlines the values and standards that professionals should adhere to in their practice. It serves as a guide for professionals to ensure that they act in an ethical manner and maintain the integrity of their profession. While a code of ethics is important in promoting ethical behavior, it does not guarantee that all members of a profession will always act ethically.

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  • 8. 

    Which of the following statements is most accurate? 

    • A.

      Ethical behavior at times may be illegal

    • B.

      Legal behavior is always ethical behavior

    • C.

      Legal standards are a benchmark for ethical behavior.

    • D.

      All of the above

    Correct Answer
    A. Ethical behavior at times may be illegal
    Explanation
    Ethical behavior at times may be illegal because there can be situations where an individual's actions align with their personal ethical beliefs but contradict the legal standards of society. Just because an action is legal does not necessarily mean it is ethical, as laws can be flawed or outdated. Therefore, ethical behavior can sometimes involve breaking the law in order to uphold higher moral principles. Legal behavior is not always ethical, and legal standards can serve as a benchmark for ethical behavior but are not always synonymous with it.

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  • 9. 

    Investment professionals have a special responsibility to act ethically because:

    • A.

      The industry is heavily impacted by regulations.

    • B.

      The profession has adopted a code of ethics.

    • C.

      They are entrusted to protect client's assets.

    • D.

      None of the above

    Correct Answer
    C. They are entrusted to protect client's assets.
    Explanation
    Investment professionals have a special responsibility to act ethically because they are entrusted to protect client's assets. As professionals in the industry, they are given the authority and access to handle and manage clients' investments. This fiduciary duty requires them to act in the best interests of their clients, putting their clients' needs and goals ahead of their own. By acting ethically, investment professionals ensure that they are fulfilling their obligation to safeguard and grow their clients' assets, maintaining trust and integrity in the industry.

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  • 10. 

    Which of the following most likely determines unethical behavior?.

    • A.

      External factors such as environmental or cultural elements

    • B.

      The person's intrinsic motivation.

    • C.

      The person's lifestyle and character

    • D.

      All of the above

    Correct Answer
    A. External factors such as environmental or cultural elements
    Explanation
    External factors such as environmental or cultural elements are most likely to determine unethical behavior. These factors can influence an individual's decision-making process and moral compass. For example, if an individual grows up in an environment where unethical behavior is normalized or rewarded, they may be more likely to engage in such behavior themselves. Similarly, cultural norms and societal pressures can also play a significant role in shaping an individual's ethical choices. Intrinsic motivation and personal lifestyle and character can certainly influence behavior, but external factors are often more influential in determining unethical behavior.

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Our quizzes are rigorously reviewed, monitored and continuously updated by our expert board to maintain accuracy, relevance, and timeliness.

  • Current Version
  • Dec 29, 2023
    Quiz Edited by
    ProProfs Editorial Team
  • Feb 28, 2014
    Quiz Created by
    Sheilamstrong
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