CAMS Transaction Monitoring 5

Question 1

Which of the following BEST describes 'model validation' as applied to a transaction monitoring system?

Accepted Answer

An independent review assessing whether the model performs as intended and produces reliable outputs

Answer

Model validation is an independent, systematic assessment of a transaction monitoring model's conceptual soundness, data integrity, and performance outcomes.

Question 2

A correspondent bank notices that a respondent bank consistently sends high volumes of transactions to a jurisdiction on the FATF blacklist. What is the correspondent bank's MOST appropriate initial action?

Accepted Answer

Conduct enhanced due diligence on the respondent bank and its transaction flows

Answer

Enhanced due diligence is the appropriate first step to understand the nature and legitimacy of the flows before taking more drastic action like termination.

Question 3

Which of the following transaction patterns is MOST consistent with the 'integration' stage of money laundering?

Accepted Answer

Using commingled funds from a shell company to purchase luxury goods that are resold legitimately

Answer

Integration involves reintroducing laundered funds into the legitimate economy, such as purchasing and reselling assets through seemingly lawful transactions.

Question 4

A transaction monitoring analyst determines after investigation that an alert does not represent suspicious activity. What must the analyst document?

Accepted Answer

The rationale and evidence supporting the decision to close the alert without filing a SAR

Answer

Regulators require that alert dispositions—especially closures without SAR filing—be supported by documented rationale and evidence so the decision can be audited.

Question 5

Which of the following is the BEST indicator that a financial institution's transaction monitoring program has adequate coverage?

Accepted Answer

Scenarios are mapped to identified money laundering typologies relevant to the institution's products and customer base

Answer

Effective coverage means monitoring scenarios are directly tied to real-world typologies specific to the institution's risk profile, not simply high alert volumes.

CAMS - Certified Anti-Money Laundering Specialist Certification Practice Test

CAMS - Certified Anti-Money Laundering Specialist Certification Practice Test

CAMS Transaction Monitoring 5