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Friday Five – 4 May – 5 Questions in 5 Minutes

Friday Five – 4 May – 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 is the difference between gilts and corporate bonds?
    1. Gilts are guaranteed as they are government backed, but corporate bonds offer no guarantee
    2. Gilts are always bought and sold at their nominal rate, whereas corporate bonds are traded on the bond market so could be bought or sold for less than £100
    3. Gilts are loans to the government, whilst corporate bonds are loans to companies
    4. Corporate bonds pay interest to the investor, whilst gilts pay no interest
  1. Florence has recently become self-employed. She is aware that she will have to pay National Insurance contributions but wants to know how. You tell her that:
    1. Class 2 and class 4 are normally paid by monthly direct debit
    2. Class 2 is included with the income tax self-assessment and class 4 is normally paid by monthly direct debit
    3. Class 2 and class 4 are included with the income tax self-assessment
    4. Class 2 is normally paid by monthly direct debit and class 4 is included with the income tax self-assessment
  1. If Mary wishes to achieve a higher level of single-tier Pension by increasing her qualifying years she should consider paying which of the following National Insurance Contributions?
    1. Class 3A.
    2. Class 3.
    3. Class 2.
    4. Class 4.
  1. In relation to the State pension credit, an individual reaching State pension age on or after 6 April 2016 may normally be entitled to:
    1. The guarantee credit only
    2. The savings credit only
    3. Both the guarantee and the savings credit
    4. Neither the guarantee nor the savings credit
  1. Modern portfolio theory (MPT) categorises risk as being one of two types. The collapse of Equitable Life is an example of what type of risk?
    1. Event
    2. Liquidity
    3. Non-systemic
    4. Systemic

 

Answers

  1. C – See R01 Study Text, Chp 2
    Grab our taster mock exam paper for CII R01. Click here to download.

 

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

 

  1. B – See R04 Study Text, Chp 7
    Grab our taster mock exam paper for CII R04. Click here to download.

 

  1. A – See R05 Study Text, Chp 3
    Grab our taster mock exam paper for CII R05. Click here to download.

 

  1. C – See J10 Study Text, Chp 7
    Grab our taster mock exam paper for CII J10. 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!)

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