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Friday Five – 12 June 2015 – 5 Questions in 5 Minutes

Friday Five – 12 June 2015 – 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.

Deep breath…

 

Questions

  1. What is the maximum fine The Pensions Regulator can impose on a company for breaching the law?
    1. £500,000
    2. £100,000
    3. £50,000
    4. £5,000
  1. If two assets have a correlation of 0.25, what does this tell us about their relationship within a portfolio?
    1. They are closely linked and would therefore increase the volatility within a portfolio
    2. They are negatively correlated and will move in opposite directions
    3. They are positively correlated and you would expect them to move in the same direction at the same time
    4. They have low correlation so would reduce volatility within a portfolio
  1. Joanne sold an investment property to her sister at a market value of £120,000 making a gain of £40,000, but has allowed her sister 2 years to pay for the house. When would Joanne be liable to pay any Capital Gains Tax (CGT)?
    1. Joanne would be required to pay any CGT due based on the contract date
    2. Joanne would be required to pay any CGT due based on when she receives the money from her sister
    3. There would be no CGT liability as Joanne has sold to a close relative
    4. Joanne is liable to pay any CGT due based on the contract date but can request to pay in instalments
  1. At age 80, Sidney dies, leaving behind a wife and child. Sidney had uncrystallised benefits. How can the fund pay out any lump sum death benefits?
    1. No lifetime allowance test required and can pay out a lump sum subject to 35% tax charge.
    2. Benefit crystallisation event so lifetime allowance test required with any excess above the lifetime allowance taxed at 55%.
    3. No lifetime allowance test required and lump sum is payable tax free.
    4. No lifetime allowance test required and can pay out lump sum death benefits subject to 55% tax charge.
  1. Zero dividend preference shares in a split capital investment trust are subject to:
    1. income tax on the income and capital gains tax on gains
    2. capital gains tax on gains
    3. withholding tax on the income and capital gains tax on gains
    4. income tax on the income and free of capital gains tax on gains

 

 

Answers

  1. C – See R01 Study Text, Chp 4 Section D2
    Grab our taster mock exam paper for CII R01. Click here to download.

 

  1. D – See R02 Study Text, Chp 8 Section B1
    Grab out taster mock exam paper for CII R02. Click here to download.

 

  1. D – See R03 Study Text, Chp 3 Section B2
    Grab our taster mock exam paper for CII R03. Click here to download.

 

  1. D – See R04 Study Text, Chp 2.2 Section E2A
    Grab our taster mock exam paper for CII R04. Click here to download.

 

  1. B – See J12 Study Text, Chp 4 Section B1C
    Grab our taster mock exam paper for CII J12. 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!)

 

 

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