CQIB Final Exam – Banking Ethics, Financial Systems, Risk Management, and Regulatory
Compliance Study Guide
Role of Banks - correct answer ✔✔1. Act as financial intermediary between savers and
borrowers.
2. Facilitates the creation of money.
3. Creates financial products and services.
4. Develops mechanisms for transferring money and making payments.
5. Contributes to the development of the economy.
Debt Capital Markets - correct answer ✔✔When a large company or government wants to
finance a project, it may look to issue bonds to raise capital.
An Investment bank would help out in planning/documentation of bond issuance.
Equity Capital Markets - correct answer ✔✔When a company needs more money in order to
grow, they may look at undertaking an initial public offering(IPO). Where it sells it's shares to
the public/investors.
The investment bank will put together a prospectus explaining the terms of the
offering and the risks it carries, managing the issuance process and helping the price of the
offering.
, Private Placements - correct answer ✔✔Where customers plan an offering of bonds with an
institutional investor such as
an insurance company or a retirement fund.
Can have be a quicker option as there is lower regulatory requirements.
Mergers and Acquisitions - correct answer ✔✔Where a company is looking to buy another
company, investment banks offer
advice on how the company should proceed with the acquisition, including the pricing of the
offer.
Deposits for a Bank - correct answer ✔✔Banks source their funds largely from deposits.
Savings deposits - wages and salary.
Fixed term deposits - lump sum deposited for a specific period.
Current deposits - business accounts.
Types of Bank Loans - correct answer ✔✔1. Overdraft
2. Credit card
3. Short term money loans
4. Long term loans
5. Bills of exchange and promissory notes
6. Equipment leasing and hire purchase
7. Trade finance
Compliance Study Guide
Role of Banks - correct answer ✔✔1. Act as financial intermediary between savers and
borrowers.
2. Facilitates the creation of money.
3. Creates financial products and services.
4. Develops mechanisms for transferring money and making payments.
5. Contributes to the development of the economy.
Debt Capital Markets - correct answer ✔✔When a large company or government wants to
finance a project, it may look to issue bonds to raise capital.
An Investment bank would help out in planning/documentation of bond issuance.
Equity Capital Markets - correct answer ✔✔When a company needs more money in order to
grow, they may look at undertaking an initial public offering(IPO). Where it sells it's shares to
the public/investors.
The investment bank will put together a prospectus explaining the terms of the
offering and the risks it carries, managing the issuance process and helping the price of the
offering.
, Private Placements - correct answer ✔✔Where customers plan an offering of bonds with an
institutional investor such as
an insurance company or a retirement fund.
Can have be a quicker option as there is lower regulatory requirements.
Mergers and Acquisitions - correct answer ✔✔Where a company is looking to buy another
company, investment banks offer
advice on how the company should proceed with the acquisition, including the pricing of the
offer.
Deposits for a Bank - correct answer ✔✔Banks source their funds largely from deposits.
Savings deposits - wages and salary.
Fixed term deposits - lump sum deposited for a specific period.
Current deposits - business accounts.
Types of Bank Loans - correct answer ✔✔1. Overdraft
2. Credit card
3. Short term money loans
4. Long term loans
5. Bills of exchange and promissory notes
6. Equipment leasing and hire purchase
7. Trade finance
