Friday Five – 19 June 2015 – 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.

Ready, steady, go…

Questions

1. What must a non-real time financial promotion include?
   1. Past performance data for the past 5 years
   2. That tax may be subject to change in the future
   3. The shelf life of the promotion
   4. Name of firm and contact point

2. Calder PL has issued 4 types of preference shares, how would you normally expect the shareholders to be ranked?
   1. According to the date the investor purchased the shares, with the earliest having higher priority
   2. According to the level of investment, with larger investors having higher priority
   3. According to their priority for payment of dividends and entitlement to capital on winding up
   4. According to the number of preference shareholders compared to ordinary shareholders

3. Edward is a company director and is considering the best way of taking remuneration from his company. What might be a disadvantage for him of taking a low salary and high dividends?
   1. Dividends are not relevant earnings and so could restrict pension contributions
   2. Corporation tax would be payable at a higher rate as the salary is not being withdrawn from company profits
   3. A reduced salary would reduce any State pension entitlement in the future
   4. The dividend payment would be subject to a higher rate of National Insurance

4. Bob registered his £1.65m pension fund for Primary protection. Assuming he drew all his benefits in 2014/15, he will be entitled to a personal lifetime allowance of:
   1. £1.25million.
   2. £1.65million.
   3. £1.98million.
   4. £1.8million.

5. A mortgage protection insurance policy is designed to cover:
   1. All mortgage related expenses
   2. The monthly mortgage interest only
   3. The full amount of monthly mortgage repayments
   4. Mortgage repayments and any associated life policies only

Answers

1. D – See R01 Study Text, Chp 7 Section A4A
   Grab our taster mock exam paper for CII R01. Click here to download.

2. C – See R02 Study Text, Chp 1:2 Section C3A
   Grab out taster mock exam paper for CII R02. Click here to download.

3. A – See R03 Study Text, Chp 11 Section B4
   Grab our taster mock exam paper for CII R03. Click here to download.

4. C – See R04 Study Text, Chp 2.2 Section F1
   Grab our taster mock exam paper for CII R04. Click here to download.

5. A – See R05 Study Text, Chp 9 Section C1B
   Grab our taster mock exam paper for CII Ro5. 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!)

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