CFE Financial Institution Operations & Management 2

Question 1

Under the Bank Secrecy Act (BSA), what is the minimum cash transaction amount that triggers a Currency Transaction Report (CTR) filing requirement?

Accepted Answer

$10,000

Answer

Financial institutions must file a CTR for any cash transaction exceeding $10,000 in a single business day.

Question 2

A financial institution's liquidity risk management program should primarily ensure the institution can meet its obligations:

Accepted Answer

At minimum cost and without incurring unacceptable losses

Answer

Effective liquidity risk management ensures obligations can be met as they come due at minimum cost and without unacceptable losses.

Question 3

Which regulatory body is primarily responsible for supervising federally chartered credit unions in the United States?

Accepted Answer

National Credit Union Administration (NCUA)

Answer

The NCUA charters, regulates, and supervises federal credit unions and administers the National Credit Union Share Insurance Fund.

Question 4

An institution's asset/liability management (ALM) committee is MOST concerned with managing which type of risk?

Accepted Answer

Interest rate risk and its effect on net interest margin

Answer

The ALM committee primarily manages interest rate risk to protect the institution's net interest income and economic value of equity.

Question 5

Under prompt corrective action (PCA) provisions, a bank is classified as 'critically undercapitalized' when its tangible equity capital ratio falls below:

Accepted Answer

2%

Answer

A bank is critically undercapitalized when its tangible equity to total assets ratio drops to 2% or less, triggering the most severe PCA restrictions.

(CFE) Certified Financial Examiner Practice Test

(CFE) Certified Financial Examiner Practice Test

CFE Financial Institution Operations & Management 2