Friday Five – 10 August – 5 Questions in 5 Minutes

Welcome to this week’s Friday Five – 5 Questions in 5 Minutes Every Friday

What’s this all about?

It’s a bit of Friday Fun where we provide you with 5 questions relevant to a mix of CII exams. The challenge is for you to answer them in 5 minutes. Answers at the bottom of the page.

Questions

IMPORTANT!  These questions relate to examinable tax year 2017/18, examinable by the CII until 31 August 2018.  They do not relate to tax year 2018/19 which is only examinable by the CII from 1 September 2018.

1. Which of the following statements regarding ‘structured’ and ‘unstructured’ loans is incorrect?
   1. Structured loans are viewed as lower risk than unstructured
   2. Unstructured loans tend to be for larger amounts
   3. The interest rate applied on an unstructured loan is usually linked to a base rate
   4. There is often no collateral to back up a structured loan

2. Stefan bought £1,000 nominal value of Treasury 7% 2016. What interest payment can he normally expect to receive?
   1. £70 every year
   2. £5.80 every month
   3. £35 every 6 months
   4. £23.33 quarterly

3. Sarah is a basic rate taxpayer and in August 2013 took out a 10-year qualifying life policy as a savings plan. Regarding this policy, which of the following is true?
   1. If she is a UK resident she will receive full tax relief on the premiums
   2. For the policy to keep its qualifying status she cannot pay more than £36,000 in premiums over the term
   3. The premiums will be taken into account on maturity when a chargeable event is triggered
   4. The premiums must be paid monthly, annually or as a single premium

4. Which features would you normally associate with a defined benefit scheme pension? Tick all that apply.
   1. Lump sum death benefits.
   2. Pension based on a percentage of salary.
   3. Guaranteed income for life.
   4. Prospect of investment growth.

5. A comprehensive Private Medical Insurance policy will sometimes provide cover for which of the following in the context of long term care provision?
   1. Home Nursing
   2. The cost of treatment for long term incurable conditions
   3. Osteoarthritis
   4. Dementia

Answers

1. A – See R01 Study Text, Chp 2
   Grab our taster mock exam paper for CII R01. Click here to download.

2. C – See R02 Study Text, Chp 1:1
   Grab our taster mock exam paper for CII R02. Click here to download.

3. B – See R03 Study Text, Chp 10
   Grab our taster mock exam paper for CII R03. Click here to download.

4. ABC – See R04 Study Text, Chp 6:1
   Grab our taster mock exam paper for CII R04. Click here to download.

5. A – See CF8 Study Text, Chp 4
   Grab our taster mock exam paper for CII CF8. Click here to download.

How did you find this week’s questions? Did you complete them in 5 minutes? Did you get them all correct? Do you disagree with any?

Do let us know by leaving a comment below – we promise to read them all. (Humour particularly appreciated on a Friday!)