Friday Five – 4 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 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. What is the difference between an Enduring Power of Attorney and a Lasting Power of Attorney?
   1. A lasting power of attorney cannot be used to make gifts
   2. A lasting power of attorney allows the attorney to make decisions regarding the donor’s welfare as well as financial matters
   3. Under an Enduring power of attorney, power is only given in respect of the donor’s health and welfare
   4. Under an Enduring power of attorney, the attorney has to be over 18

2. Direct investment in commodities is not practical for most investors, how else could commodity investment normally be achieved? Tick all that apply.
   1. Through an Exchange Traded Note (ETN)
   2. Through investing in funds that invest in commodities
   3. Through investment in companies that produce commodities
   4. Through Exchange Traded Commodities (ETCs)

3. Simon makes a £7,500 contribution to his employer in respect of his new company car. How will this be treated when calculating the taxable benefit?
   1. £7,500 will be deducted from the list price
   2. £5,000 will be deducted from the list price
   3. The contribution is ignored in the calculation
   4. The first £2,500 of the contribution is deducted

4. GAD rates used for capped drawdown are based on which of the following underlying annuity assumptions? Tick all that apply.
   1. Level in payment
   2. Monthly in advance
   3. 10-year guarantee
   4. Single life

5. Which of the following is true regarding an index-linked bond?
   1. Only the coupon is uplifted by inflation
   2. Only the maturity payment is uplifted by inflation
   3. The coupon and maturity payment are uplifted by inflation
   4. The price of the bond is uplifted by inflation

Answers

1. B – See R01 Study Text, Chp 3
   Grab our taster mock exam paper for CII R01. Click here to download.

2. BCD – 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 1
   Grab our taster mock exam paper for CII R03. Click here to download.

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

5. C – See J12 Study Text, Chp 2
   Grab our taster mock exam paper for CII J12. 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!)