Friday Five – 16 September – 5 Questions in 5 Minutes
Last updated on September 25th, 2019 at 4:36 am
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.
These questions relate to examinable tax year 2016/17, examinable until 31 August 2017.
- What are the rules regarding a firm taking out insurance indemnity itself for FCA penalties or enforcement costs?
- A firm cannot indemnify itself against any FCA penalties, costs or enforcement action
- A firm can only indemnify itself against a financial penalty imposed by the FCA
- A firm cannot indemnify itself against an FCA penalty, but it can against the cost of defending enforcement action or costs it may be ordered to pay
- A firm can only indemnify itself against any FCA costs it may be ordered to pay
- Amanda is considering a future transfer of her son’s Child Trust Fund to a Junior ISA. She should be aware that: Tick all that apply
- the tax position of the fund is the same for both products
- her son can withdraw the proceeds when he reaches 18
- payments are cumulative so can be made up in later years
- income generated of more than £100 will be taxed on her
- At retirement, Bernice decides to buy a With Profit annuity. She selects an anticipated bonus rate of 5%. The same year, the provider declares a bonus rate less than this figure. The effect this has on the level of annuity payment she receives is that it will:
- increase after 12 months.
- decrease immediately.
- decrease the following year.
- have no effect.
- Kelsey, a fund manager with a medium-sized investment firm in the city, has decided to take a significant divergence from his fund’s benchmark and gone overweight in emerging markets. What could this mean?
- It would suggest Kelsey is seeking out-performance and represents an opportunity for further investment into the fund
- Kelsey is an effective fund manager and this is evidence the fund is actively managed
- Kelsey is adopting a contrarian approach to fund selection
- The divergence represents greater risk so greater short-term volatility would be expected in Kelsey’s fund
- Glenda needs to go into residential care following a stroke although she has been told that in a year or so’s time she may have recovered sufficiently to return home to her house valued at £250,000, which she is very attached to. She needs to release some funds to help fund her care – which of the following would not be suitable in these circumstances?
- Lifetime mortgage with drawdown
- Borrow from relatives
- Short term letting of the house
- Home Reversion Plan
- C – See R01 Study Text, Chp 5:2, Section F3A
Grab our taster mock exam paper for CII R01. Click here to download.
- AB – See R03 Study Text, Chp 12, Section B3B/C
Grab our taster mock exam paper for CII R03. Click here to download.
- C – See R04 Study Text, Chp 6:1, Section C2H
Grab our taster mock exam paper for CII R04. Click here to download.
- D – See J10 Study Text, Chp 3, Section C2
Grab our taster mock exam paper for CII J10. Click here to download.
- D – See ER1 Study Text, Chp 5, Section I
Grab our taster mock exam paper for CII ER1. 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?
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