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Acams CKYCA Exam - Topic 5 Question 16 Discussion

A bank's business team has developed a new strategy, which includes the introduction of prepaid cards as a new high-risk product offering. The compliance team has proposed to impose a monetary limit on each prepaid card and limit the offering to the existing customers of the bank only. Which best describes the risk impact of the controls proposed by the compliance team?
B) Residual risk will decrease.
A) Inherent risk will increase
C) Inherent risk will decrease.
D) Residual risk will increase.

Acams CKYCA Exam - Topic 5 Question 16 Discussion

Actual exam question for Acams's CKYCA exam
Question #: 16
Topic #: 5
[All CKYCA Questions]

A bank's business team has developed a new strategy, which includes the introduction of prepaid cards as a new high-risk product offering. The compliance team has proposed to impose a monetary limit on each prepaid card and limit the offering to the existing customers of the bank only. Which best describes the risk impact of the controls proposed by the compliance team?

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Suggested Answer: B

Inherent risk is the natural risk before controls are applied. The compliance team's measures (monetary limits and restricting to existing customers) reduce the exposure to misuse, thereby lowering the residual risk - the risk that remains after controls are implemented.


by Dyan at Jun 19, 2026, 01:30 PM

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Monroe
24 days ago
I feel like D could be true. New products often bring unexpected risks, even with controls.
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Shenika
29 days ago
I’m leaning towards C. Limiting to existing customers should lower inherent risk too.
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Tricia
1 month ago
I think B is the best choice. It makes sense to reduce residual risk with those limits.
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Ashlyn
1 month ago
Not so sure about that, seems risky either way!
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Glenna
1 month ago
Definitely agree, residual risk should decrease with those controls.
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Ailene
2 months ago
Wait, how does limiting to existing customers help?
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Meaghan
2 months ago
I think residual risk will actually increase with those limits.
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Tarra
2 months ago
Sounds like a smart move to limit exposure!
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Josefa
2 months ago
Based on what we studied, I believe that by imposing limits, the inherent risk should decrease, but I’m not confident about how that affects the residual risk.
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Kenny
2 months ago
I’m a bit confused about the difference between inherent and residual risk in this context. Could limiting the prepaid cards actually increase inherent risk?
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Shelba
3 months ago
I remember a similar question where limiting access to a product helped decrease risk, so I’m leaning towards option B.
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James
3 months ago
I think the compliance team's controls might actually reduce the residual risk, but I'm not entirely sure how that ties into inherent risk.
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