FREE AIFA Risk Management & Regulatory Compliance Questions and Answers

Question 1

What is the primary goal of risk management?

Accepted Answer

Minimize risk to acceptable level

Answer

To eliminate all risk.

Answer

Increase exposure to risk.

Answer

Avoid compliance procedures.

Question 2

Which is an example of operational risk?

Accepted Answer

Internal process failure

Answer

Interest rate changes.

Answer

Currency fluctuations.

Answer

Regulatory fines.

Question 3

What is compliance in finance?

Accepted Answer

Following laws and regulations

Answer

Avoiding laws.

Answer

Disregarding policy updates.

Answer

Promoting unethical conduct.

Question 4

Which agency enforces securities regulation in the U.S.?

Accepted Answer

SEC

Answer

IRS.

Answer

FBI.

Answer

OSHA.

Question 5

What is reputational risk?

Accepted Answer

Damage to company image

Answer

Loss from interest rates.

Answer

A decline in inventory levels.

Answer

A temporary IT outage.

Question 6

What does AML stand for in compliance?

Accepted Answer

Anti-Money Laundering

Answer

Automated Market Leverage.

Answer

Asset Market Listing.

Answer

Annual Market License.

Question 7

Which is a key element of a compliance program?

Accepted Answer

Ongoing staff training

Answer

Legal ignorance.

Answer

Hiding violations.

Answer

Avoiding documentation.

Question 8

What is a risk appetite statement?

Accepted Answer

Level of risk company accepts

Answer

A list of employee preferences.

Answer

Quarterly earnings statement.

Answer

Shareholder report.

Question 9

Why are internal audits important?

Accepted Answer

Ensure effective controls

Answer

To detect fraud externally.

Answer

To file tax returns.

Answer

To replace external audits.