Friday Five – 30 June – 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 2016/17, examinable by the CII until 31 August 2017.  They do not relate to tax year 2017/18 which is only examinable by the CII from 1 September 2017.

1. Which of the following is responsible for watching for systemic risks to the financial system as a whole?
   1. The Prudential Regulation Authority
   2. The Financial Conduct Authority
   3. The Financial Policy Committee
   4. HM Treasury

2. The share price of an investment trust is said to be trading at a discount. What does this mean?
   1. The demand for the investment trust is high
   2. The net asset value of the unit trust has been diluted to take into account all outstanding warrants
   3. Shareholders are ‘buying’ the underlying assets at a lower price than they would pay if they bought the same investments directly
   4. The existence of the discount means that the investment trust is less volatile than a broadly equivalent unit trust

3. Which of the following would be liable for National Insurance Contributions (NICs)?
   1. Paul who works as a part-time mechanic earning £120 per week, his 2nd job is a florist earning £80 per week and he also works some evenings delivering pizzas for which he earns £75 per week
   2. Stuart works for 2 separate companies, although there are some common directors between them, he is a builder for one company and works in the accounts department at the other. He earns £90 a week from each
   3. Steve is a skilled computer technician and works for 5 subsidiaries of an estate agent providing IT services for which he earns £100 a week from each
   4. Mark has two part-time jobs earning £95 and £130 per week each, they are separate companies with separate payrolls

4. State Pensions are funded on a ‘pay as you go’ basis. What does this mean?
   1. Revenue from income tax is used to pay for the State pensions of today.
   2. The current working population pay into their future NEST benefits.
   3. NICs of the current working population pay for State pensions of today.
   4. Revenue from all the direct taxes is used to pay for current State pensions.

5. How is money viewed by those following the Muslim faith?
   1. You can only profit by exchanging cash
   2. You are not allowed to earn interest
   3. You are not allowed to lend money
   4. You are not allowed to borrow money

Answers

1. C – See R01 Study Text, Chp 4
   Grab our taster mock exam paper for CII R01. Click here to download.

2. C – See R02 Study Text, Chp 6:1
   Grab our taster mock exam paper for CII R02. Click here to download.

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

4. C – See R04 Study Text, Chp 1
   Grab our taster mock exam paper for CII R04. Click here to download.

5. B – See R07 Study Text, Chp 6
   Grab our taster mock exam paper for CII R07. 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!)