Friday Five – 18 January – 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. Which of the following is responsible for watching for systemic risks to the financial system as a whole?
   1. The Prudential Regulation Authority
   2. The Financial Conduct Authority
   3. The Financial Policy Committee
   4. HM Treasury

2. David is keen to reduce the risk of his assets, what are the 2 ways he could achieve this?
   1. Hedging and diversification
   2. Correlation and standard deviation techniques
   3. Systematic and non-systematic risk applications
   4. Efficient frontier theory and risk ratios

3. Bill and Ben are brothers and jointly own an investment bond. A chargeable event has occurred resulting in a gain of £10,000. How is this apportioned between Bill and Ben?
   1. The gain is split in the same proportion as their ownership
   2. If Ben caused the chargeable event through a part surrender he would be liable
   3. The gain is always split 50/50 on a joint investment bond
   4. The gain is held over until total encashment of the bond

4. To qualify as a QROPS the scheme must be established in a country which:
   1. agrees to implement the same pension regulations that apply in the UK.
   2. has a double taxation agreement in place with the UK
   3. agrees not to impose any pension flexibility.
   4. is outside the UK and notifies HMRC annually that the scheme meets the required conditions to be a QROPS.

5. The factors used to calculate the amount of capital required under a protection policy to generate the net income needed are broadly based on:
   1. Inflation rates
   2. Interest rates
   3. Temporary annuity rates
   4. Average earnings indexes

Answers

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

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

3. A – See R03 Study Text, Chp 10
   Grab our taster mock exam paper for CII R03. Click here to download.

4. B – See R04 Study Text, Chp 2.2
   Grab our taster mock exam paper for CII R04. Click here to download.

5. C – See R05 Study Text, Chp 10.1
   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?

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