Friday Five – 19 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 2015/16, examinable by the CII until 31 August 2016. They do not relate to tax year 2016/17 which is only examinable by the CII from 1 September 2016.

1. Which of the following rules apply to the reporting of complaints? – tick all that apply
   1. Firms must submit statistics regarding complaints twice a year
   2. Firms must report the number of contracts cancelled within the cooling off period
   3. Firms must report the number of complaints closed within 4 weeks or less of receipt
   4. Firms must distinguish and notify the FCA of expressions of dissatisfaction and actual complaints
   5. Firms must report the number of complaints closed within 8 weeks of receipt

2. Liz has been off work sick for 6 months and is being paid through her employer’s income protection (IP) policy. Which of the following statements concerning the tax treatment of the IP is correct?
   1. Liz will receive a gross amount of IP benefit from her employer as sick pay
   2. The premiums paid by the employer are not classed as an allowable expense
   3. The benefit is paid directly to the employer and treated as a trading receipt
   4. The premiums are treated as a benefit in kind for Liz

3. Desmond dies at the age of 68 in receipt of a scheme pension. His wife Debbie will receive a secure income in the form of a:
   1. dependant’s scheme pension paid tax-free.
   2. lifetime annuity paid tax-free.
   3. dependant’s scheme pension taxed as her pension income under PAYE.
   4. dependant’s lifetime annuity taxed as her pension income under PAYE.

4. Company X has a beta of 1.5. If the expected return on a Treasury bill is 3% and the expected return on the market portfolio is 7%, what is the expected return for Company X?
   1. -3%
   2. 7.5%
   3. 9%
   4. 15%

5. Which of the following is a feature of a healthcare annuity?
   1. The individual must be in need of care and benefits may cease if the individual recovers
   2. Income is taxable if paid directly to the individual
   3. The underlying funds are liable to basic rate tax
   4. A reduced life expectancy will increase the cost to the client

Answers

1. ACE – See R01 Study Text, Chp 6, Section C2
   Grab our taster mock exam paper for CII R01. Click here to download.

2. C – See R03 Study Text, Chp 1, Section G7A
   Grab our taster mock exam paper for CII R03. Click here to download.

3. C – See R04 Study Text, Chp 2.2, Section E3B
   Grab our taster mock exam paper for CII R04. Click here to download.

4. C – See J10 Study Text, Chp 8, Section C3
   Grab our taster mock exam paper for CII J10. Click here to download.

5. A – See CF8 Study Text, Chp 5, Section C3
   Grab our taster mock exam paper for CII CF8. 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!)