Friday Five – 30 September – 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 2016/17, examinable until 31 August 2017.

1. When recommending a product, it is important that its suitability is discussed – which of the following would normally be discussed at this stage?
   1. The tax treatment and remuneration for the adviser
   2. The term of the product and the client’s retirement age
   3. The premium and the client’s average annual salary
   4. The tax treatment and investment risk of the product

2. An investment has a high standard deviation around the expected return. What does this tell us about the investment?
   1. The investment would be classed as low risk
   2. The investment has low correlation with other asset classes
   3. The investment is producing returns broadly in line with expectations
   4. The investment would be considered volatile and risky

3. Bill and Ben are brothers and jointly own an investment bond. A chargeable event has occurred resulting in a gain of £10,000. How is this apportioned between Bill and Ben?
   1. The gain is split in the same proportion as their ownership
   2. If Ben caused the chargeable event through a part surrender he would be liable
   3. The gain is always split 50/50 on a joint investment bond
   4. The gain is held over until total encashment of the bond

4. Bob registered his £1.65m pension fund for Primary protection. Assuming he drew all his benefits in 2016/17, he will be entitled to a personal lifetime allowance of:
   1. £1.25million.
   2. £1.65million.
   3. £1.98million.
   4. £1.8million.

5. Robert has life assurance provided by his employer through his pension scheme which includes a continuation option. This means that Robert can:
   1. Pay to continue the cover if he leaves the company
   2. Take out a new policy if he leaves the company based on his age at the time
   3. Continue to receive the cover if he leaves the company
   4. Transfer the cover to a new employer if he leaves the company

Answers

1. D – See R01 Study Text, Chp 8, Section C2B
   Grab our taster mock exam paper for CII R01. Click here to download.

2. D – See R02 Study Text, Chp 3, Section A1
   Grab our taster mock exam paper for CII R02. Click here to download.

3. A – See R03 Study Text, Chp 10, Section F2G
   Grab our taster mock exam paper for CII R03. Click here to download.

4. C – See R04 Study Text, Chp 2.2, Section F1
   Grab our taster mock exam paper for CII R04. Click here to download.

5. B – See R05 Study Text, Chp 4, Section A7C
   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!)