Friday Five – 21 October – 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 2016/17, examinable until 31 August 2017.

1. If two friends buy a house together in unequal shares, what might be the best form of legal ownership?
   1. Joint tenancy – because neither can sell without the other agreeing
   2. Tenancy in Common – each owner holds their share separately and there’s no requirement for the shares to be equal
   3. Shared ownership – recognises each individual’s interest in the property
   4. Tenancy agreement – to reflect the corresponding differences in the mortgage payments

2. Which of the following is one of the main types of security traded in the money markets?
   1. Traded endowments
   2. Exchanged traded funds
   3. Derivatives
   4. Commercial bills

3. Hannah has just started a hairdressing business with anticipated earnings for the first year of £5,000. What is her position in relation to national insurance contributions?
   1. She must apply to NICO for a certificate of exemption from class 2 NICs
   2. She must advise NICO that her earnings are expected to be below the small profits threshold
   3. She must decide for herself whether to pay Class 2 contributions assuming her actual earnings stay below £5,965
   4. She must pay the Class 4 weekly flat rate of £2.80

4. Debbie has a basic salary of £40,000 and benefits in kind totalling £7,500 per annum. Debbie’s employer contributes 5% of her basic salary to her pension and Debbie tops this up with a contribution of 8% of her total relevant UK earnings. What is the total gross contribution being made to her pension plan?
   1. £4,640.
   2. £5,850.
   3. £6,175.
   4. £5,800.

5. Which of these statements might cause a yield curve to be flat?
   1. Investors demanding higher returns for longer redemption periods
   2. There are no expected radical changes to interest rates
   3. A degree of optimism over future interest rates
   4. Investors anticipate lower short-term interest rates

Answers

1. B – See R01 Study Text, Chp 3, Section E3B
   Grab our taster mock exam paper for CII R01. Click here to download.

2. D – See R02 Study Text, Chp 1:1, Section A5B
   Grab our taster mock exam paper for CII R02. Click here to download.

3. C – See R03 Study Text, Chp 2, Section B1A
   Grab our taster mock exam paper for CII R03. Click here to download.

4. D – See R04 Study Text, Chp 2, Section A
   Grab our taster mock exam paper for CII R04. Click here to download.

5. B – See J12 Study Text, Chp 2, Section G3A
   Grab our taster mock exam paper for CII J12. 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!)