Q:
Money laundering has become a specific concern in all legitimate financial institutions worldwide. Regardless of the exact means by which the attempt to launder the money, distinct phases have been identified. These are:
I. Placement
II. Intermediation
III. Layering
IV. Integration
a) II, III, IV
b) I, III, IV
c) I, II, III
d) I, II, III, IV
A:
The correct answer is b).
There are three phases to money laundering. Placement is the physical disposal of the initial proceeds of money derived from illegal activities. Layering involves the creation of a set of transactions--often with one financial institution in several jurisdictions--designed to confuse the single source of funds. Integration, the final phase involves placing the laundered funds, often along with legitimate funds, into financial institutions.

MORE FAQS

  1. What methods are used to launder money?

  2. If caught, what implications does money laundering have on a business?

  3. Which of the following signatures are required on a client’s new account form ...

  4. Which of the following are tools that are employed by the Federal Reserve in its efforts to control the money supply?

  5. Which of the following are not types of open-end management investment companies ...

  6. Under the Telephone Consumer Act of 1991, a telemarketer must provide which of the following to a called ...

  7. Which statements about common shareholder rights are FALSE? I. A shareholder may exchange shares to ...

  8. Which of the following statements is (are) true with respect to setting the proper constraints in managing ...

  9. Why does fighting money laundering reduce overall crime?

  10. Which of the following statements is (are) true with respect to the calculation of returns of composites ...

  11. Which TWO statements are TRUE about writing covered calls? I ...

  12. Under the Uniform Securities Act, which of the following are defined as securities ...

  13. If a sales representative moves from one broker-dealer to another ...

  14. A margin account has a long market value of $12,000, a debit balance of -$6,000 ...

  15. Federal covered securities are subject to which of the following requirements ...

  16. Which of the following statements is (are) true with respect to the factors that a manager must take ...

  17. What two components are used to calculate risk-adjusted return? I ...

  18. Which of the following, under the NASD Conduct Rules, would constitute a complaint ...

  19. Which of the following deliveries for a 600 share order, broker-dealer to broker-dealer ...

  20. Which statement(s) is/are FALSE about market risk?

RELATED FAQS

  1. What methods are used to launder money?

    Learn about the methods that criminals use when they are looking to launder money. Many different methods are used, and they ...
  2. If caught, what implications does money laundering have on a business?

    Understand the damaging effects of money-laundering on businesses as well as anti-laundering measures businesses can use ...
  3. Which of the following signatures are required on a client’s new account form ... ...

    The correct answer is B. While local practices of a broker-dealer might require the client to sign the form, even when opening ...
  4. Which of the following are tools that are employed by the Federal Reserve in its ...

    I. Moral suasionII. Changing the discount rateIII. Changing the reserve requirementIV. Changing the prime interest rate A. ...
  5. Which of the following are not types of open-end management investment companies ...

    The correct answer is d) Hedge funds are extremely aggressive entities that engage in margin and short-selling.  They are ...
  6. Under the Telephone Consumer Act of 1991, a telemarketer must provide which of the ...

    The correct answer is d. All the choices except II are specific requirements of the Act. In addition, the law places time-of-day ...
RELATED TERMS
  1. Money Laundering

    Money laundering is the process of creating the appearance that ...
  2. Anti Money Laundering - AML

    A set of procedures, laws or regulations designed to stop the ...
  3. Certified Anti-Money Laundering Specialist - CAMS

    A professional designation awarded by the Association of Certified ...
  4. Financial Action Task Force (FATF)

    An intergovernmental organization that designs and promotes policies ...
  5. Smurf

    Colloquial term for a money launderer. Also refers to one who ...
  6. Jurisdiction Risk

    The risk that arises when operating in a foreign jurisdiction. ...

You May Also Like

Hot Definitions
  1. Law Of Demand

    A microeconomic law that states that, all other factors being equal, as the price of a good or service increases, consumer ...
  2. Cost Of Debt

    The effective rate that a company pays on its current debt. This can be measured in either before- or after-tax returns; ...
  3. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  4. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  5. Keynesian Economics

    An economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed ...
  6. Society for Worldwide Interbank Financial Telecommunications ...

    A member-owned cooperative that provides safe and secure financial transactions for its members. Established in 1973, the ...
Trading Center