FINAL PRE-BOARD: Regulatory Framework for Business Transactions

CTDI
RFBT: Final Pre-Board Examination ARV
INSTRUCTIONS: Choose the letter that best corresponds to your answer. Strictly no erasures allowed

1. The period of prescription for the criminal action for infringement of an intellectual property is –
a. 2 years from the commission of the crime
b. 3 years from the commission of the crime
c. 5 years from the commission of the crime
d. 7 years from the commission of the crime
e. 10 years from the commission of the crime

2. S1 – Patentable inventions refer to any technical solution of a problem in any field of human activity which is
new, involves an inventive step and is industrially applicable.
S2 – Copyright is confined to literary and artistic works which are original intellectual creations in the literary
or artistic domain that is protected from the moment it was registered.
S3 – A trademark is any visible sign capable of distinguishing the goods of an enterprise and shall include a
stamped or marked container of goods.
a. S1 and S2 are false
b. S1 and S3 are false
c. S2 and S3 are false
d. S1 and S2 are true
e. Only 1 statement is false

3. To achieve the objectives of the Securities Regulation Code (SRC), the SRC provides for the following
regulatory controls, except:
a. Registration of Partnerships and Corporations
b. Registration of securities
c. Registration of market participants
d. Expanded SEC powers as market Regulator
e. Mechanisms of market participants

4. Under this policy, all companies, listed or applying for listing, are required to divulge truthfully and
accurately, all material information about themselves and the securities they sell, for the protection of the
investing public.
a. Merit System
b. Reportorial System
c. Full Material Disclosure
d. Registered System
e. Transparency

5. S1 - Garnishment of deposits in banks are allowed.

S2 – Foreign currency deposits may also be garnished, attached and be subjected to any court process.
a. All statements are correct
b. All statements are false
c. Only S1 is incorrect
d. Only S2 is incorrect

6. An action was instituted by a company against it erring official who stole funds which were deposited in his
peso savings and foreign currency. Can the court compel the bank to disclose the deposits?
a. No, it is not the subject matter of litigation.
b. No, it does not fall under one of the statutory limitations.
c. Yes, the peso deposit may be examined upon order of the court since it is the subject of litigation. But
the foreign currency may not be inquired into without the written consent of the depositor.
d. Yes, both deposits may be inquired into since they the subject matter of litigation.

7. Pedro is jobless but reputed to be a jueteng operator. He has never been charged or convicted of any crime.
He maintains several bank accounts and has purchased 5 houses and lots for his children from the Villar
Realty, Inc. Since he does not have any visible job, the bank reported his purchases to the AMLC. Is the
action of the bank valid and tenable?
a. No, since the deposits are covered by the Secrecy of Bank Deposits Law
b. No, since there was no written waiver for the disclosure
c. Yes, it is a covered transaction transaction
d. Yes, it is a suspicious transaction

8. S1 – A person cannot be charged of both the offense of money laundering and the unlawful activity. False
S2 – Failure to report a covered transaction or suspicious transaction is one of the instances when money
laundering is committed.
a. All statements are correct
b. All statements are false
c. Only S1 is incorrect
d. Only S2 is incorrect

9. S1 – Foreign individuals and non-bank corporations may own or control up to forty percent (40%) of the
voting stock of a domestic bank.

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FINAL PRE-BOARD: Regulatory Framework for Business Transactions
S2 – Foreign banks are not subject to the 40% limitation prescribed under Section 11 of the GBL. Foreign
banks may acquire 100% of the voting stocks of an existing bank or invest in up to 100% of the voting
stocks of a new subsidiary.
a. All statements are correct
b. All statements are incorrect
c. Only S1 is correct
d. Only S2 is correct

10. The number of Board of Directors of a bank, including the independent directors are –
a. 5 – 15, two of whom are independent directors
b. 5 – 15, three of whom are independent directors
c. 5 – 15, four of whom are independent directors
d. 5 – 15, five of whom are independent directors

11. The percentage of foreign-owned voting stocks in a bank shall be determined by the citizenship of the
individual stockholders in that bank. The citizenship of a corporation which is a stockholder in a bank shall
follow the citizenship of the controlling stockholders of the corporation, irrespective of the place of
incorporation.
a. Incorporation Test
b. Control Test
c. Business Domicile Test
d. Center of Management Rule
e. Grandfather Rule

12. Are banks which can exercise the powers of an investment house and invest in non-allied enterprise. They
have highest capitalization requirement.
a. Thrift Banks
b. Rural Banks
c. Universal Banks
d. Commercial Banks
e. Cooperative Banks

13. The following are restrictions imposed for DOSRI accounts, except:
a. Business Judgment Rule
b. Waiver of Secrecy Deposits
c. Arms Length Rule
d. Aggregate Ceilings Rule
e. Individual Ceilings Rule

14. The BSP may help banks having liquidity problems by, except:
a. Ordering the immediate dissolution thereof
b. Granting emergency loans in an amount not exceeding 50% of its total deposits and deposit substitutes
c. Appointing a conservator
d. Appointing a receiver and order the liquidation of the Bank

15. S1 – The bank has the right to compensation. It can set off deposits with the indebtedness of the depositor
that are due and demandable.
S2 – S2 – Generally, only a universal bank or commercial bank can accept or create demand deposits.
a. All statements are correct
b. All statements are incorrect
c. Only S1 is correct
d. Only S2 is correct

16. The vote required so that the maximum deposit insurance cover may be adjusted in such amount, for such
period, and/or for such deposit products –
a. the adjustments is approved by a majority vote of the Board of Directors of PDIC in a meeting called for
the purpose and chaired by the Secretary of Finance;
b. the adjustments is approved by a 2/3 vote of the Board of Directors of PDIC in a meeting called for the
purpose and chaired by the Secretary of Finance;
c. the adjustments is approved by a unanimous vote of the Board of Directors of PDIC in a meeting called
for the purpose and chaired by the Secretary of Finance;
d. the adjustments is approved by a mere majority of the quorum of the Board of Directors of PDIC in a
meeting called for the purpose and chaired by the Secretary of Finance;

17. S1 – The liability of the PDIC for insured deposits rests upon the existence of deposits with the insured bank
and on the negotiability or non-negotiability of the certificates evidencing these deposits.
S2 – The claim under PDIC must be filed within 2 years from actual takeover by the receiver.
a. All statements are correct
b. All statements are incorrect
c. Only S1 is correct
d. Only S2 is correct

18. X Bank was closed by the Monetary Board on account of insolvency. At the time it was closed, A has three
accounts with X Bank and each account has an outstanding balance of P250,000 or a total amount of
P750,000. How much can A recover from the PDIC?
a. The amount recoverable is P750,000, each of the account shall be taken into consideration
b. The amount recoverable is only P500,000 for only one account
c. The amount recoverable is only P500,000 for all the three accounts
d. The amount recoverable is only P500,000 for the two accounts

19. S1 – Notice of dishonor under BP 22 may be oral or in writing.

S2 – Violation of BP 22 is categorized as a transitory or continuing crime.

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FINAL PRE-BOARD: Regulatory Framework for Business Transactions
a. All statements are correct
b. All statements are incorrect
c. Only S1 is correct
d. Only S2 is correct

20. The accused was convicted under BP 22 for having several checks which were dishonored by the drawee
bank on their due date because the accused closed her account after the issuance of the checks. On appeal,
she argued that she could not be convicted under BP 22 by reason of the closing of her account because
said law applies solely to checks dishonored by reason of insufficiency of funds and that at the time she
issued the checks concerned, she had adequate funds in the bank. Is her contention correct?
a. Yes, the application thereof would be tantamount to an ex post facto law
b. Yes, the application thereof would be a violation of the right against double jeopardy.
c. No, the law punishes two acts and the act in case at bar falls under the second way of violating it
d. No, the proof beyond reasonable doubt was not established

21. The period of prescription under BP 22 is 4 years counted from –

a. Knowledge of Insufficiency of funds
b. Presentment of the check for payment from the drawee bank
c. Dishonor of the check by the drawee bank
d. Date of the giving of the notice of dishonor to the drawer
e. Lapse of the 5 banking days from the notice of dishonor within which to make good the check

22. In case of involuntary rehabilitation of a sole proprietorship, partnership or corporation in Section 13 of

FRIA, the persons who will file the petition are the:
a. creditor or group of creditors with a claim of or the aggregate of whose claims is, at least P1,000,000.00
or at least 25% of the subscribed capital stock or partners’ contributions, whichever is higher.
b. creditor or group of creditors with a claim of or the aggregate of whose claims is, at least P2,000,000.00
or at least 25% of the subscribed capital stock or partners’ contributions, whichever is higher.
c. creditor or group of creditors with a claim of or the aggregate of whose claims is, at least P1,000,000.00
or at least 15% of the subscribed capital stock or partners’ contributions, whichever is higher.
d. creditor or group of creditors with a claim of or the aggregate of whose claims is, at least P1,000,000.00
or at least 20% of the subscribed capital stock or partners’ contributions, whichever is higher.
e. creditor or group of creditors with a claim of or the aggregate of whose claims is, at least P5,000,000.00
or at least 25% of the subscribed capital stock or partners’ contributions, whichever is higher.

23. In case of Involuntary Liquidation under Section 91 of FRIA:

a. Three or more creditors and the aggregate of whose claims is at least either P1,000,000.00 or at least
25% of the subscribed capital stock or partner’s contributions of the debtor, whichever is higher.
b. Five or more creditors and the aggregate of whose claims is at least either P1,000,000.00 or at least
25% of the subscribed capital stock or partner’s contributions of the debtor, whichever is higher.
c. Three or more creditors and the aggregate of whose claims is at least either P500,000.00 or at least
25% of the subscribed capital stock or partner’s contributions of the debtor, whichever is higher.
d. Three or more creditors and the aggregate of whose claims is at least either P1,000,000.00 or at least
50% of the subscribed capital stock or partner’s contributions of the debtor, whichever is higher.
e. Five or more creditors and the aggregate of whose claims is at least either P1,000,000.00 or at least
50% of the subscribed capital stock or partner’s contributions of the debtor, whichever is higher.

24. The following are excluded from the operation of FRIA, except:
a. Banks
b. Pre-need companies
c. Insurance companies
d. National and local government units
e. Sole proprietorship

25. It shall refer to restoration of the debtor to a condition of successful operation and solvency, it is shown that
its continuance of operation is economically feasible and its creditors can recover by way of present value of
payments projected in the plan, more if the debtor continues as a going concern than if it is immediately
liquidated.
a. Receivership
b. Voluntary Liquidation
c. Involuntary liquidation
d. Pre-Negotiated Restoration
e. Rehabilitation

26. The Court may dismiss the petition for rehabilitation under the following instances, except:
a. There is a substantial likelihood for the debtor to be successfully rehabilitated
b. The debtor is not insolvent
c. The petition is a sham filing intended only to delay the enforcement of the rights of the creditor/s or any
group of creditors
d. The petition, the Rehabilitation Plan and the attachments thereto contain any material false or
misleading statements
e. The debtor has committed acts of misrepresentation or in fraud of creditor/s or group of creditors

27. The following are requisites of Suspension of payment, except:

a. Debtor is insolvent
b. The obligations are discharged
c. Applies only to individual debtor
d. May be filed by the debtor
e. There is no minimum amount of liabilities prescribed

28. The following are the requisites for involuntary liquidation of individual debtor, except:
a. Debtor is insolvent

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FINAL PRE-BOARD: Regulatory Framework for Business Transactions
b. Creditors must prove the acts of insolvency
c. The individual debtor files the petition
d. Posting of bond of creditors is required
e. Liquidation order is issued after trial

29. Involuntary liquidation of individual debtor is distinguished from involuntary dissolution of business
organizations
a. There can be one or more creditors
b. The debt or aggregate of debts must be at least P1,000,000 or equivalent to 25% of the subscribed
capital or partner’s contribution whichever is higher
c. The business organization will be dissolved
d. There must be an act of insolvency

30. This is a legal document signed by each of the organizers and includes the name of the cooperative, its
purposes, scope of business, etc.
a. Economic survey
b. Treasurer’s certification
c. Articles of Cooperation
d. Bylaws

31. Who makes important decisions for the cooperative?

a. General Assembly
b. Documentation Committee
c. Election Committee
d. Finance Committee
e. Board of Directors

32. The paid-up-share capital in a Cooperative should not be less than what amount?
a. P 2,000
b. P10,000
c. P 5,000
d. P12,000
e. P15,000

99. An Associate member in Cooperative is:

S1 – One who has no right to vote nor be voted upon and shall be entitled only to such rights and privileges as the
bylaws may provide.

S2 - One who meets the minimum requirements of regular membership, continues to patronize the cooperative for
three (3) years, and signifies his/her intention to remain a member shall be considered a regular member

a. Both are correct

b. Both are incorrect
c. S1 is correct, S2 is incorrect
d. S1 is incorrect, S1 is correct

99. The directors and officers of a cooperative shall not be entitled to any per diem when, in the preceding
calendar year, the cooperative reported a net loss or had a dividend rate less than the official inflation rate
for the same year.
S2 - Any compensation other than per diems may be granted to directors by a 2/3 vote of the members with
voting rights at a regular or special general assembly meeting specifically called for the purpose.

a. Both are correct

b. Both are incorrect
c. S1 is correct, S2 is incorrect
d. S1 is incorrect, S1 is correct

An Indian son was watching his Indian father shoot the birds in the sky with his bow and arrow.
Every time the Indian father releases his arrow, he would definitely hit the mark and hit the
birds who were flying in the horizon.

Out of amazement, the Indian son asked his Indian father, “Father how come you always hit
the birds when you release your arrow??”

The Indian father looked at his Indian son and smiled, “Son, it is because I do not aim for the
birds but instead I aim for the Sun!”

Moral of the story: AIM HIGH!

Strength doesn’t come from what you can do.

It comes from OVERCOMING
the things you once thought you couldn’t!

Good luck and God bless! =)

RFBT by Atty. Amado R. Villegas, Jr. Page 4