Friday Five – 25 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 2018/19, examinable until 31 August 2019.

1. Which of the following would you expect to find in the revised Remuneration Code within the FCA Handbook?
   1. Reduce short-term bonuses and base bonuses on longer term performance.
   2. Reward risk-taking and outperformance to secure good quality staff.
   3. Ban overtime payments for staff who have a ‘material impact’.
   4. Avoid over-reliance on high salaries, instead promote performance-related pay.

2. In Behavioural Finance, Prospect Theory means that:
   1. behavioural abnormalities will eventually be priced out of the market
   2. the effect of human behaviour on the market can be predicted
   3. behavioural finance is a collection of explanations of anomalies
   4. people do not always behave rationally

3. Aaron is 65 and is looking to reduce his potential Inheritance Tax liability. He has a portfolio of shares which he is considering transferring to members of his family or to a trust, but his main concern is losing long term control of the asset. What would be the best thing for him to do in these circumstances?
   1. Transfer the shares to a bare trust and retain control for as long as he wanted.
   2. Gift the shares to his children but continue to receive the dividends.
   3. Transfer the shares to a discretionary trust and appoint himself as a beneficiary.
   4. Transfer the shares to a discretionary trust and appoint himself as a trustee.

4. A contract-based pension scheme has which advantage over a trust-based pension scheme?
   1. Member contribution refunds for early leavers
   2. Member contributions deducted from gross pay before tax and national contributions are applied
   3. Less costly and time-consuming administration.
   4. Protection for the members, with their interest being safeguarded by Trustees

5. Who of the following would be eligible for Statutory Sick Pay?
   1. Philip, employed part-time and not paying any National Insurance contributions
   2. Steven, self-employed and paying Class 2 and Class 4 National Insurance contributions
   3. Brenda, currently on a career break and paying Class 3 National Insurance contributions
   4. Miriam, employed and paying Class 1 National Insurance contributions

Answers

1. A – See R01 Study Text, Chp 5:2
   Grab our taster mock exam paper for CII R01. Click here to download.

2. D – See R02 Study Text, Chp 3
   Grab our taster mock exam paper for CII R02. Click here to download.

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

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

5. D – See R05 Study Text, Chp 3
   Grab our taster mock exam paper for CII R05. 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?

If you found this quiz useful for your CII exam revision, please do share it with your colleagues.