Friday Five – 17 August – 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

IMPORTANT!  These questions relate to examinable tax year 2017/18, examinable by the CII until 31 August 2018.  They do not relate to tax year 2018/19 which is only examinable by the CII from 1 September 2018.

1. Why has the FCA devised rules regarding client assets and client money?
   1. To minimise the risk of clients’ money being used by the firm without agreement
   2. To ensure the firm can identify the correct level of money for each client
   3. So the firm can show it has taken the appropriate level of risk with each asset
   4. To ensure that all cheques are banked within prescribed timescales

2. Alison invested £10,000 for 3 years at 6%. At the end of this period the accumulated capital and interest was invested for a further 3 years at 5%. What will be the total sum she receives at the end of the 6-year period?
   1. £23,486.00
   2. £13,787.02
   3. £11,434.16
   4. £13,300.00

3. Suzy has recently become employed following a period of self-employment and has discovered she has paid too much National Insurance through her employer’s payroll. What can she expect to happen to rectify this situation?
   1. She will automatically be credited with the overpayment as a lump sum at the end of the tax year
   2. Her National Insurance code will be adjusted immediately to reflect the overpayment
   3. Her Pay As You Earn code will be adjusted immediately to reflect the overpayment
   4. The over payment will be used to cover any underpayment that occurred whilst she was self-employed before any repayment is made to her

4. When the administrators of a defined benefit scheme calculate an early leaver transfer value, the process of converting the lump sum value of pension benefits at retirement to a capital value in today’s terms is known as:
   1. discounting.
   2. revaluing.
   3. capitalising.
   4. securitising.

5. In calculating the amount of premium to be paid for a life assurance policy, what is normally added to a loaded premium to arrive at the final premium payable?
   1. Initial percentage charge
   2. Underwriting fee
   3. Policy charge
   4. Mortality adjustment

Answers

1. A – See R01 Study Text, Chp 5:2
   Grab our taster mock exam paper for CII R01. Click here to download.

2. B – See R02 Study Text, Chp 4
   Grab our taster mock exam paper for CII R02. Click here to download.

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

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

5. C – See R05 Study Text, Chp 4
   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!)