Friday Five – 20 November – 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 2015/16, examinable until 31 August 2016.

1. What regular reports must an authorised firm provide to the FCA? – tick all that apply
   1. Number of clients within their client bank
   2. Amount held in client bank accounts
   3. Persistency statistics
   4. Number of complaints received

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. Susan is considering purchasing unit trusts and OEICs. She should be aware that: Tick all that apply
   1. Both products are exempt from Capital Gains Tax in the hands of the investor
   2. She will be buying units in the unit trust and shares in the OEIC
   3. Both unit trusts and OEICs are classed as collective investments
   4. Dividends from both products carry a 10% tax credit which is non-reclaimable

4. Which of the following rules apply to drawing an income under capped drawdown? Tick all that apply.
   1. Benefits can stay in capped drawdown for as long as the member wishes.
   2. The maximum permitted income review frequencies of three /one years were re-set with effect from 6 April 2015.
   3. Maximum income is 150% of the basis amount as per the 2011 GAD tables.
   4. It is not possible to transfer an existing capped drawdown plan into a new capped drawdown plan with another provider.
   5. It is possible to designate additional funds into an existing capped drawdown plan.

5. Karen has recently taken out an interest only mortgage and used the funds to buy an annuity to boost her income. What feature of the plan is likely to significantly increase the total amount she owes the lender under the plan?
   1. Changes to interest rates in future
   2. Cost of property insurance
   3. Interest roll up
   4. Charges levied by the lender

Answers

1. BCD – See R01 Study Text, Chp 6 Section C2
   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 our taster mock exam paper for CII R02. Click here to download.

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

4. ACE – See R04 Study Text, Chp 6:2 Section E1
   Grab our taster mock exam paper for CII R04. Click here to download.

5. C – See ER1 Study Text, Chp 8 Section C2
   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?

Do let us know by leaving a comment below – we promise to read them all. (Humour particularly appreciated on a Friday!)