Friday Five – 22 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 2015/16, examinable until 31 August 2016.

1. Which of the following key stakeholder groups might not be essential in embedding an ethical culture at sector and firm level?
   1. Clients
   2. Employees
   3. Regulators
   4. Media

2. How can ‘portfolio drift’ be mitigated?
   1. By periodically rebalancing the investment portfolio
   2. By encashing the highest performing assets
   3. By encashing the lowest performing assets
   4. By encashing 10% of the highest and lowest performers

3. With regard to taxation, trustees of an interest in possession trust where the asset is rental property should be aware that:
   1. they will only ever be charged to basic rate tax on the rental income
   2. a higher rate taxpaying beneficiary will not owe any extra tax on rental income
   3. they are entitled to tax relief for the expenses they incur in managing the trust
   4. as trustees they will be entitled to a personal allowance

4. Who, from the following list of applicants for an income protection policy is likely to be charged the highest premium?
   1. Derek, aged 45, with a deferred period of 13 weeks
   2. Chloe, aged 52, with a deferred period of 26 weeks
   3. Arthur, aged 47, with a deferred period of 8 weeks
   4. Julia, aged 48, with a deferred period of 4 weeks

5. An investor buys £2,000 worth of 6% Treasury Stock 2016 priced at £106.16. What is the flat yield?
   1. 17.6%
   2. 7.6%
   3. 5.66%
   4. 5.65%

Answers

1. D – See R01 Study Text, Chp 10 Section D1
   Grab our taster mock exam paper for CII R01. Click here to download.

2. A – See J10 Study Text, Chp 4 Section A2
   Grab our taster mock exam paper for CII J10. Click here to download.

3. A – See R03 Study Text, Chp 1 Section K4A
   Grab our taster mock exam paper for CII R03. Click here to download.

4. D – See R05 Study Text, Chp 6 Section D1
   Grab our taster mock exam paper for CII R05. Click here to download.

5. D – See J12 Study Text, Chp 2 Section G2A
   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!)