Friday Five – 12 February – 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 2015/16, examinable until 31 August 2016.

1. How is capital adequacy assessed?
   1. Risk identification and management processes
   2. Monitoring the value of assets
   3. Monitoring the firm’s liabilities
   4. Monitoring the proportion of liquid assets over capital

2. Which of the following is not an underlying assumption for the Capital Asset Pricing Model (CAPM)?.
   1. Information is free and available to all investors
   2. All investors have identical holding periods
   3. The quantity of risky assets is limitless to include liquidity
   4. Investors are rational and risk averse

3. Alex has recently bought £5,400 worth of shares through an online platform provider. Which of the following is he liable for?
   1. Stamp duty of £30
   2. Stamp duty of £27
   3. Stamp duty reserve tax of £30
   4. Stamp duty reserve tax of £27

4. Defined benefit schemes represent an open-ended liability for employers but which factor does not directly contribute to their potential liability?
   1. Age & marital status of the members.
   2. Number of deaths prior to retirement.
   3. Returns of the underlying investments.
   4. Company profits.

5. Cassandra, aged 75, with investments totalling £250,000, is a self-funded resident of a residential home. If her healthcare needs increase, what possible effect could this have on her entitlement to assistance with funding her care?
   1. She may be entitled to Attendance Allowance
   2. She could become entitled to an NHS continuing care contribution
   3. She may be eligible to be provided with assistive devices
   4. She could become entitled to a local authority contribution towards her care

Answers

1. A – See R01 Study Text, Chp 5:1 Section E2
   Grab our taster mock exam paper for CII R01. Click here to download.

2. C – See R02 Study Text, Chp 3 Section B3
   Grab our taster mock exam paper for CII R02. Click here to download.

3. D – See R03 Study Text, Chp 7 Section B
   Grab our taster mock exam paper for CII R03. Click here to download.

4. D – See R04 Study Text, Chp 4.1 Section B5A
   Grab our taster mock exam paper for CII R04. Click here to download.

5. B – See CF8 Study Text, Chp 10 Section E1A
   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!)