IFIC Mutual Funds Licensing Practice Exam · Question
Scenario 6: Which of the following is considered a 'red flag' for potential money laundering by a client?
Making large cash deposits, especially in small denominations, without a clear legitimate source, is a common 'red flag' for money laundering. Legitimate invest
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Question: Scenario 6: Which of the following is considered a 'red flag' for potential money laundering by a client?
Answer options: ✅ Making a large deposit of cash in small denominations.
- Regularly contributing to Registered Retirement Savings Plans (RRSPs).
- Providing clear and consistent identification documents.
- Having a well-defined investment objective.
Correct answer: Making a large deposit of cash in small denominations.
Explanation: Making large cash deposits, especially in small denominations, without a clear legitimate source, is a common 'red flag' for money laundering. Legitimate investors typically use cheques or electronic transfers for large investments. The other options are normal investor behavior. The correct answer is "Making a large deposit of cash in small denominations.". This capacity-fill scenario 6 reinforces the same competency for the ific bank and follows the certified explanation standard.
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