Free Access ACFE.CFE-Law.v2023-05-05.q38 Practice Test (Page 3)

Question 6

Which of the following is the MOST ACCURATE statement about rules prohibiting securities broker-dealers from making unsuitable recommendations on investments or investment strategies?

A.A suitability violation occurs when a broker trades in a client's account without obtaining prior approval for making the transaction(s).

B.A suitability violation occurs when a broker recommends an investment or investment strategy that is inconsistent with the client's objectives

C.A suitability violation occurs when a broker enters into transactions and manages a client's account for the purpose of generating excessive commissions

D.A suitability violation occurs when a broker does not carry out a trade requested by or promised to a customer

Question 7

Under the best practices listed in the Financial Action Task Force (FATF) Recommendations concerning large cash transactions with customers which of the following transactions would require a report to be Wed with the government?

A.A lump-sum cash deposit to a bank above the jurisdiction's designated threshold

B.An international purchase of a small boat with a lump-sum cash payment below the jurisdiction's designated threshold

C.A cash payment to a restaurant supplier for restaurant supplies above the jurisdiction's designated threshold

D.A domestic credit card purchase of a piece of jewelry above the jurisdiction's designated threshold

Question 8

Which of the following is NOT required for a contract transaction or scheme to be classified as an investment contract?

A.Profits derived solely from the investor's management activity

B.investment m a common enterprise

C.An investment of money or other asset

D.The expectation of making a profit

Question 9

Which of the following statements concerning digital currencies, such as bitcoin, is MOST ACCURATE?

A.Digital currencies are subject to all of the same regulations as payments made through traditional financial institutions

B.Digital currencies are not typically used to launder money due to strict customer identification or recordkeeping requirements enforced in all jurisdictions

C.Digital currencies are attractive to money launderers because they are a payment method that provides complete anonymity

D.Digital currencies are attractive to money launderers because payments often cross jurisdictional boundaries, making it difficult for authorities to pursue enforcement

Question 10

Which of the following is the MOST ACCURATE statement about the different types of alternative dispute resolution'?

A.In a mediation session, the mediator decides who should win the dispute at issue

B.The agreements reached in mediations are generally nonbinding.

C.The decisions reached in all arbitrations are always binding

D.In an arbitration proceeding the arbitrator acts as a judge or jury by deciding the dispute at issue on its merits

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