Free Acams CKYCA Actual Exam Questions - Question 3 Discussion

I’m thinking A could be it too since a politically exposed person, even a junior one, can raise red flags and increase risk independently from business changes. So my pick is A.

D, new markets bring unknown risks and regulatory challenges.

Option D seems right since expanding internationally often means dealing with new laws and risks the company didn’t face before, which naturally raises inherent risk more than just adding an account or a junior PEP.

Probably A since any PEP link can inherently boost risk, even at junior levels.

It’s D for me. Expanding beyond the home country usually exposes the company to new regulatory environments and potentially riskier jurisdictions, which can increase inherent risk even without specific details on the countries involved. A junior-level PEP might be less risky than a senior one, so A feels less certain. Plus, opening another account (B) or a beneficial owner going public (C) often means more transparency, which usually lowers risk instead of increasing it.

Maybe A makes more sense because a politically exposed person (PEP) often means higher risk no matter their level, due to potential links with corruption or influence. The other options are less direct; opening another cash account (B) seems routine, and going public (C) usually means more transparency, which might actually lower risk. Expanding internationally (D) can increase risk but depends a lot on where, so it’s less clear-cut than A.

D Opening new markets abroad often means dealing with unfamiliar regulations, different compliance standards, and possibly higher risks from corruption or money laundering depending on the country. This usually bumps up inherent risk more clearly than just adding accounts or having a junior PEP. Even if the countries aren't specified, crossing borders generally complicates things and ups the risk profile substantially.

A/C? A junior PEP might increase risk, but a beneficial owner going public on a US exchange could also raise risks due to increased scrutiny and transparency demands. Both add different but significant risks.

Option A could be solid since a politically exposed person, even at junior level, often triggers stricter scrutiny and raises risk more directly than just expanding business or adding accounts.

Maybe A makes sense too since PEPs usually attract more attention and can lead to higher risk even if the employee is junior. It’s a direct red flag for inherent risk, unlike just opening another account.

A The junior employee being politically exposed could increase risk independently since PEPs are linked to corruption and bribery, which raises inherent risk beyond just expanding business operations.

Good point, Ahmed Q. D fits since crossing borders usually means more regulatory and compliance risks.

A/C? A junior employee being politically exposed could raise red flags since PEPs often come with higher scrutiny and risk of corruption. On the other hand, if a beneficial owner goes public on a US exchange (C), that usually means more transparency and regulation, which might actually reduce risk rather than increase it. So I’d say either A or C, with A probably being more likely to increase inherent risk. Options B and D seem less directly linked to inherent risk compared to potential political exposure.

D imo, expanding internationally usually means dealing with new regulations and currency risks, which generally ups inherent risk more than just having a politically exposed person or going public.

Adding accounts (B) feels routine, so it’s less likely to raise inherent risk.

A. A politically exposed junior employee might raise red flags since PEPs usually mean higher scrutiny, even if they're not senior. That alone can boost inherent risk more than just adding accounts or going public.

Option D seems plausible since expanding internationally can bring more regulatory risks, but does the question specify which type of risk? Inherent risk could mean financial, compliance, or operational, so some clarity would help.