Friday Five – 26 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 2018/19, examinable until 31 August 2019.

1. How do good business ethics make good business sense?
   1. By demonstrating an awareness of ethical investments, a firm displays the breadth of their knowledge
   2. Good business ethics usually translates into a better working environment for all employees
   3. A strong ethical culture helps build trust and confidence among consumers increasing their engagement with firms and products
   4. Good business ethics always leads to higher rates of commission

2. What is it called when instead of a government stepping in to help a financial institution in trouble the help comes from the institution’s shareholders?
   1. Bail-in risk
   2. Currency risk
   3. Event risk
   4. Bail-out risk

3. Which of the following individuals has a potential Capital Gains Tax liability? Tick all that apply.
   1. Susan lived in her home for 5 years before moving out 18 months prior to its sale
   2. Jim’s house was empty for 3 years while he was travelling although he lived there before he went away and came back to it on his return
   3. Peter and Paul are civil partners and have owned two homes for the past 3 years and now wish to claim exemptions on one property each
   4. Mark has owned his house for 10 years although only lived in it for 5 years

4. Under his capped drawdown arrangement Terry is now considering the purchase of a short-term annuity. He should be aware that: Tick all that apply.
   1. they will only be available from the provider of his capped drawdown fund.
   2. the annuity must be paid at least annually.
   3. the annuity cannot have a term longer than five years.
   4. the annuity can be guaranteed during its term.

5. Income Protection is likely to be a higher priority than Critical Illness cover for most people because:
   1. It has a shorter deferred period
   2. It allows higher sums assured
   3. It covers significantly more medical conditions
   4. It pays the benefits tax free

Answers

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

2. A – See R02 Study Text, Chp 5
   Grab our taster mock exam paper for CII R02. Click here to download.

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

4. CD – See R04 Study Text, Chp 6:2
   Grab our taster mock exam paper for CII R04. Click here to download.

5. C – See R05 Study Text, Chp 7
   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?

Do let us know by leaving a comment below – we promise to read them all. (Humour particularly appreciated on a Friday!)