Friday Five – 11 November – 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

These questions relate to examinable tax year 2016/17, examinable until 31 August 2017.

1. If a solicitor assisted a client with a claim on a life policy would FCA authorisation be required?
   1. Yes, as this type of work is classed as a regulated activity
   2. No, as long as it was a one-off activity
   3. Yes, as the client will have received advice
   4. No, this is classed as incidental to their professional services

2. Adrian transferred assets worth £150,000 into a trust, in which he has no interest. If he had sold the assets he would have made a gain of £40,000. If holdover relief was claimed what effect would it have on the trust?
   1. Holdover relief is not available as the value of the gift is below the nil rate band
   2. There is no CGT at the time of the transfer but the acquisition cost of the trust is reduced to £110,000
   3. Adrian has no immediate CGT liability but he would be liable to CGT on the trust’s periodic review
   4. The gain is liable to CGT by the trust at acquisition and not on Adrian at disposal

3. Once a bankruptcy order is made who is appointed to administer the bankrupt’s estate?
   1. Trustee in Bankruptcy.
   2. Administrator.
   3. Personal representative.
   4. Legal executive.

4. Modern Portfolio Theory categorises risk as being one of two types: systematic and non-systematic. Which of the following is the correct explanation of what non-systematic risk refers to?
   1. The risk of a single financial institution defaulting
   2. The risk of disruption throughout the financial system
   3. The risk of not achieving a financial target
   4. The risk that returns will be affected by stagnant growth

5. What is the most significant factor behind regional differences in the cost of local authority funding levels for residential care?
   1. Residential home fees
   2. The level of council tax
   3. Differing mortality rates
   4. Inflation rates

Answers

1. D – See R01 Study Text, Chp 6
   Grab our taster mock exam paper for CII R01. Click here to download.

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

3. A – See R04 Study Text, Chp 3
   Grab our taster mock exam paper for CII R04. Click here to download.

4. A – See J10 Study Text, Chp 7
   Grab our taster mock exam paper for CII J10. Click here to download.

5. A – See CF8 Study Text, Chp 2
   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!)