Friday Five – 14 September – 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 2018/19, examinable until 31 August 2019.

1. If a client said that all of their current investments were in emerging market funds, what might this indicate to the adviser?
   1. That the client was considering retiring abroad
   2. That the client has little confidence in the UK stock market
   3. That the client was reckless
   4. That the client has an adventurous attitude to risk

2. If an investment has a mean of 5% and a standard deviation 6%, you would expect 95% of returns to fall between:
   1. -1% and 11%
   2. -5% and 15%
   3. -7% and 17%
   4. 1% and 16%

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. In 2018/19, Paul receives a salary of £116,000. He has savings interest of £1,000 and dividend income of £40,000. Paul is a member of his employer’s occupational defined contribution pension scheme and contributions are paid via the net pay arrangement. In 2018/19 Paul pays £20,000 gross to the scheme and his employer pays £10,000.
   Calculate Paul’s tapered annual allowance.
   1. £31,500
   2. £30,000.
   3. £28,000.
   4. £25,000.

5. Karen has a combined life assurance and critical illness policy. What will happen to the sum assured on death if she makes a claim on the diagnosis of a critical illness?
   1. It will continue at the original amount for a maximum of five years
   2. It will continue at half the original amount
   3. It will only continue to exist if Karen survives for a minimum of two years
   4. It will not exist as the policy has paid out an accelerated death payment

Answers

1. D – See R01 Study Text, Chp 8
   Grab our taster mock exam paper for CII R01. Click here to download.

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

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

4. A – See R04 Study Text, Chp 2.1
   Grab our taster mock exam paper for CII R04. Click here to download.

5. D – See R05 Study Text, Chp 7
   Grab our taster mock exam paper for CII R05. 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!)