Friday Five – 3 August – 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

IMPORTANT!  These questions relate to examinable tax year 2017/18, examinable by the CII until 31 August 2018.  They do not relate to tax year 2018/19 which is only examinable by the CII from 1 September 2018.

1. What are the categories of organisations who introduce business to a firm? Tick all that apply.
   1. Partial exempt firms
   2. Firms that are not FCA authorised
   3. Exempt firms
   4. Partial FCA authorised firms
   5. Firms that are regulated by a Designated Professional Body

2. What portfolio(s) would you expect from an efficient frontier model?
   1. An optimal portfolio with the lowest level of risk
   2. A set of portfolios representing the maximum return for every given level of risk
   3. An optimal portfolio to produce the highest level of return
   4. A set of portfolios representing the minimum risk that can be achieved

3. Which of the following can be an effective strategy for reducing a company director’s liability to national insurance contributions?
   1. Sacrificing salary to increase the amount the company pays to company pension schemes
   2. Giving up their company car
   3. Arranging for their salary to be paid in ad-hoc lump sums rather than on a monthly or weekly basis
   4. Increasing their contributions into a personal pension

4. At age 80, Sidney dies, leaving behind a wife and child. Sidney had uncrystallised benefits. How can the fund pay out any lump sum death benefits?
   1. No LTA test needed and can pay out a lump sum subject to 45% tax charge.
   2. Benefit crystallisation event so LTA test needed with any excess taxed at 55%.
   3. No LTA test needed and lump sum is payable tax free if paid within 2 years.
   4. No LTA test needed and lump sum taxable at the recipient’s rate of tax.

5. A mortgage is distinguished from an absolute assignment by a right known as the:
   1. law of reassignment
   2. equity of redemption
   3. repayment of security
   4. power of retention

Answers

1. B C E – See R01 Study Text, Chp 7
   Grab our taster mock exam paper for CII R01. Click here to download.

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

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

4. D – See R04 Study Text, Chp 2.2
   Grab our taster mock exam paper for CII R04. Click here to download.

5. B – See R05 Study Text, Chp 4
   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!)