VendorsExamsEnterprise
Support
Request an ExamContact UsFAQ

Certified Know Your Customer Associate Free Sample Questions

Description

Covers customer identification and verification, risk rating and red flags, sanctions screening, enhanced due diligence on source of wealth and ownership structures, and profile documentation.

12 free sample questions176 in the full practice test

Try simulator

CKYCA Sample Questions

  1. Question 1

    Advanced

    Customer Identification and Verification · Identify UBO and connected/third parties

    A KYC analyst is reviewing the ownership structure of a new corporate client, 'Global Ventures Ltd.' The structure involves multiple layers of holding companies across three different jurisdictions. Layer 1 shows 'Holding A' owns 100% of the client. Layer 2 shows 'Holding B' owns 60% of 'Holding A'. Layer 3 reveals that a Trust established in a tax haven owns 100% of 'Holding B'. To comply with standard UBO identification procedures, which individual should the analyst primarily seek to identify?

    Answer and explanation

    Correct answer: A

    In complex structures involving trusts, the Ultimate Beneficial Owner (UBO) is not just the legal owner (the trustee) but also the settlor, the protector (if any), the beneficiaries, and any natural person exercising ultimate control over the trust. Identifying these individuals is crucial to understanding who ultimately controls or benefits from the corporate vehicle.

  2. Question 2

    Intermediate

    Customer Identification and Verification · Assess nature and purpose of the account

    During the onboarding of a new fintech startup, the KYC analyst notes that the entity has no physical offices and operates entirely via a decentralized team. The entity provides a registered address at a 'virtual office' provider. Which risk factor should be the primary concern regarding this address?

    Answer and explanation

    Correct answer: A

    While virtual offices are legitimate for modern businesses, they are a known red flag for shell companies used for money laundering because they provide a mailing address without a physical footprint. The analyst must verify if the lack of physical presence aligns with the business model (e.g., software development) or if it is an attempt to hide operations.

  3. Question 3

    Beginner

    Customer Identification and Verification · Complete appropriate verification procedures

    A bank is implementing a new Customer Identification Program (CIP). When verifying the identity of an individual customer using documentary methods, which combination of documents provides the strongest verification according to FATF standards?

    Answer and explanation

    Correct answer: C

    The gold standard for documentary verification is an unexpired government-issued identification (like a passport or driver's license) that includes a photograph to verify identity, combined with a secondary document like a recent utility bill or bank statement to verify the residential address.

  4. Question 4

    Intermediate

    Customer Risk Rating · Evaluate customer risk based on core risk categories

    A multinational bank uses a risk scoring model to rate new customers. The model assigns points based on Geography, Product, and Customer Type.

    Based on the risk matrix logic below, how should a 'Non-Profit Organization' (High Risk) located in 'Switzerland' (Low Risk) using only 'Wire Transfers' (High Risk) be initially categorized before mitigation?

    quadrantChart title Risk Assessment Matrix x-axis Low Geography Risk --> High Geography Risk y-axis Low Product Risk --> High Product Risk quadrant-1 High Overall Risk quadrant-2 High Overall Risk quadrant-3 Low Overall Risk quadrant-4 Medium Overall Risk Client: [0.2, 0.8]
    Answer and explanation

    Correct answer: C

    Even though the geography (Switzerland) is low risk, the combination of Customer Type (Non-Profit Organization, often considered higher risk for terrorist financing) and Product (Wire Transfers, high velocity/volume) elevates the Inherent Risk. Most risk models default to the highest risk factor present (the 'High Water Mark' principle) or use a weighted average that would push this into the High category due to 2 out of 3 factors being high.

  5. Question 5

    Advanced

    Customer Screening · Distinguish between material and immaterial hits

    Which of the following scenarios describes a 'False Negative' in the context of customer screening, and why is it considered the most dangerous outcome?

    Answer and explanation

    Correct answer: A

    A False Negative occurs when the screening system misses a true match (e.g., due to poor fuzzy matching logic or data quality issues). This is the most dangerous outcome because the institution unwittingly processes transactions for a sanctioned entity, leading to potential regulatory fines, legal action, and severe reputational damage.

  6. Question 6

    IntermediateMultiple answers

    Enhanced Due Diligence (EDD) · Identify and obtain details of source of wealth

    A KYC analyst is performing Enhanced Due Diligence (EDD) on a High Net Worth Individual (HNWI). The customer claims their wealth originates from 'early investments in cryptocurrency.' Which combination of documents would best corroborate this Source of Wealth (SoW)? (Select TWO)

    Answer and explanation

    Correct answers: A, E

    Official tax returns are strong independent verification that the wealth was declared to authorities, lending legitimacy to the claim.

    Exchange records provide a clear audit trail of the investment lifecycle: the initial fiat entry (source of funds for investment) and the trading activity that generated the capital gain (source of wealth).

Register free for 6 more questions

Or unlock all 176 CKYCA questions with explanations, timed mode and flashcards.

Related practice tests

All ACAMS practice exams