Mixed Deck — All NAB Topics Flashcards

What precautions should you take when using public Wi-Fi for banking?

Answer: Avoid banking on public Wi-Fi, or use a VPN to encrypt your connection

Public Wi-Fi networks can be monitored by hackers. Using a VPN encrypts your data, or better yet, use your cellular connection for sensitive banking activities.

For federal estate tax purposes, the death benefit of a life insurance policy owned by the decedent at death is treated how?

Answer: Included in the gross estate at the full face amount (death benefit)

Under IRC Section 2042, if the decedent held incidents of ownership over the policy, the full death benefit is included in the gross estate.

What are exchange rate risks in international transactions?

Answer: The risk that currency value changes between initiating and completing a transaction, affecting the final amount

Exchange rate fluctuations can increase or decrease the actual cost of international transactions, creating financial uncertainty for businesses and individuals.

What is the primary purpose of a NAB Corporate Mastercard issued to a business?

Answer: To allow employees to make authorized business purchases with centralized billing

A Corporate Mastercard enables employees to make approved business expenditures while consolidating charges onto a single corporate billing statement.

What obligation does NAB have under the Banking Code of Practice when a customer is identified as a 'vulnerable customer'?

Answer: To take extra care in interactions and offer tailored support, including referral to appropriate services

The Banking Code of Practice requires banks to take extra care with vulnerable customers — including those experiencing family violence, mental health issues, or financial difficulty — and provide appropriate support.

What is the purpose of NAB's Savings Goals feature in the mobile app?

Answer: Helping customers set a savings target and track progress toward it

Savings Goals lets customers name a goal, set a target amount, and visually track how close they are, helping motivate disciplined saving behavior.

Which word does NOT belong: Savings, Checking, Investment, Mortgage, Withdrawal?

Answer: Withdrawal

Withdrawal is an action/transaction, while the others are types of financial accounts or products.

What factors make up a credit score?

Answer: Payment history, amounts owed, length of credit history, new credit, and credit mix

FICO scores consider five factors: payment history (35%), amounts owed (30%), length of history (15%), new credit (10%), and credit mix (10%).

No loan is risk-free. This financial product is risk-free. What can be concluded?

Answer: This product is not a loan

Because loans are never risk-free, a risk-free product cannot be a loan.

When assessing a business loan application, which financial documents does NAB primarily review to evaluate viability?

Answer: Business activity statements and profit and loss statements

NAB reviews BAS and profit & loss statements to understand actual business revenue, expenses, and profitability before making a lending decision.

In NAB's lending assessment, what level of Loan-to-Value Ratio (LVR) typically triggers the requirement for Lender's Mortgage Insurance (LMI)?

Answer: LVR exceeding 80%

When a borrower's LVR exceeds 80%, NAB requires Lender's Mortgage Insurance to protect against default risk.

What rights does the Fair Credit Reporting Act give consumers?

Answer: The right to access their credit reports, dispute errors, and know when reports are used against them

The FCRA gives consumers the right to free annual credit reports, to dispute inaccurate information, and to be notified when credit report data is used in adverse decisions.

What is the difference between stocks and bonds?

Answer: Stocks represent ownership in a company; bonds are loans to a company or government

Stocks give shareholders partial ownership and potential dividends, while bonds are debt instruments where you lend money in exchange for regular interest payments.

Which NAB digital feature allows customers to add their NAB card to a mobile device for contactless payments?

Answer: NAB Digital Wallet (via Apple Pay, Google Pay, or Samsung Pay)

NAB supports digital wallets including Apple Pay, Google Pay, and Samsung Pay, allowing customers to make contactless payments using their mobile device.

In international trade finance, what is the primary function of a Letter of Credit (LC)?

Answer: To guarantee the exporter payment provided documents comply with LC terms

A Letter of Credit is a bank commitment to pay the exporter upon presentation of compliant documents, reducing payment risk for both buyer and seller in cross-border trade.

What does a 'stress test' in banking risk management typically assess?

Answer: The bank's resilience under severe but plausible adverse economic scenarios

Stress tests evaluate how a bank's financial position would hold up under hypothetical adverse scenarios such as economic downturns or market shocks.

What is 'pay yourself first' as a savings strategy?

Answer: Automatically transferring savings before spending disposable income

Paying yourself first means automatically directing a portion of income to savings immediately upon receiving a paycheck, before discretionary spending.

Which regulatory body sets the minimum liquidity coverage ratio (LCR) levels that NAB must maintain?

Answer: APRA, the Australian Prudential Regulation Authority

APRA sets and enforces prudential standards including the minimum LCR that ADIs like NAB must maintain.

What does the Foreign Account Tax Compliance Act (FATCA) primarily require?

Answer: Foreign financial institutions to report accounts held by US persons to the IRS

FATCA requires foreign financial institutions to identify and report to the IRS accounts held by US taxpayers, or face a 30% withholding tax on US-sourced payments.

What is an 'investment horizon'?

Answer: The length of time an investor plans to hold an investment before needing the funds

An investment horizon is the planned time period over which you intend to hold an investment, which influences the level of risk you can appropriately take on.