Friday Five – 24 March – 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. Under the FCA’s three-pillar supervision model, the majority of firms are classified as:
   1. Fixed portfolio firms
   2. Flexible portfolio firms
   3. Category 1 firms
   4. Category 4 firms

2. How often do registered Value Added Tax (VAT) traders normally have to pay any VAT due to HMRC?
   1. At the date they supply taxable goods
   2. Monthly
   3. Quarterly
   4. Annually

3. Which of the following is a minimum standard on a recently established Stakeholder pension?
   1. The maximum initial charge is 1.5%.
   2. The scheme must accept transfer payments from another pension source.
   3. Transfer charges, out of the scheme, must not be more than 10%.
   4. The minimum permitted contribution cannot be higher than £25 net.

4. James makes a lifetime gift into a trust which isn’t an absolute/bare or disabled trust. How much tax is due immediately?
   1. 20% on the amount gifted into trust
   2. 20% on the amount gifted into trust that exceeds the available nil rate band
   3. 40% on the amount gifted into trust that exceeds the available nil rate band
   4. 40% on the amount gifted into trust

5. Your firm uses an optimisation model to generate optimal portfolios on a risk/return basis that make up the efficient frontier. To run the optimisation model each of the following sets of data need to be input with the exception of?
   1. Returns of each asset class
   2. Standard deviations or risk of each asset class
   3. Correlations between each pair of asset classes
   4. The tracking error for each pair of asset classes

Answers

1. B – See R01 Study Text, Chp 5:1
   Grab our taster mock exam paper for CII R01. Click here to download.

2. C – See R03 Study Text, Chp 8
   Grab our taster mock exam paper for CII R03. Click here to download.

3. B – See R04 Study Text, Chp 5
   Grab our taster mock exam paper for CII R04. Click here to download.

4. B – See R05 Study Text, Chp 2
   Grab our taster mock exam paper for CII R05. Click here to download.

5. D – See J10 Study Text, Chp 3
   Grab our taster mock exam paper for CII J10. 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!)