Friday Five – 25 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 2019/20, examinable until 31 August 2020.

1. What is the minimum frequency a firm should test its capital adequacy?
   1. Every 3 years
   2. Every 2 years
   3. Every year
   4. Every 6 months

2. What would be considered the main limitations of using an index when comparing the performance of a portfolio? Tick all that apply.
   1. Investors would need to pay a subscription fee in order to be kept up to date with relevant indices
   2. Market capitalisation means a few large companies can have a substantial effect on the market
   3. Most indices only reflect changes in capital values
   4. Investors are unable to access information about indices directly, information is only available to stockbrokers

3. Julie is considering diversifying her portfolio by investing in gilts. She has asked you to explain the income tax and capital gains tax (CGT) position to her. You tell her that:
   1. interest is paid net of 20% tax and losses for CGT are allowable
   2. interest is usually paid gross but is taxable and any gains are CGT exempt
   3. interest is paid gross but is taxable and only qualifying gilts are CGT free
   4. interest is paid net of 20% tax and disposal of a gilt is a chargeable event

4. When considering pension sharing on divorce, which of the following cannot be shared?
   1. Additional Voluntary Contributions
   2. SERPS and S2P
   3. Public sector schemes
   4. New State Pension

5. To qualify for a full new State pension an individual must have a total of how many years’ NI contributions or credits?
   1. 26
   2. 30
   3. 35
   4. 39

Answers

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

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

3. B – See R03 Study Text, Chp 9
   Grab our taster mock exam paper for CII R03. Click here to download.

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

5. C – 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.