Friday Five – 4 September 2015 – 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 2015/16, examinable until 31 August 2016.

1. What is the Information Commissioner’s Office’s main duty?
   1. To ensure that the Data Protection Act is updated e.g. to cover text messages
   2. To levy fines on those failing to comply with the Data Protection Act
   3. To ensure consumers are able to access information
   4. To oversee compliance of the Data Protection Act

2. What does a negative Information ratio indicate?
   1. That the investor would have been better investing in cash
   2. That the investor would have been better investing in a tracker fund
   3. That the manager has added maximum value through active management
   4. That the benchmark return was a negative figure

3. When considering investing in a Venture Capital Trust (VCT), investors should be aware that: Tick all that apply
   1. income tax relief is withdrawn if the shares are disposed of within 3 years
   2. the company must not be a close company
   3. it can be listed on any EEA stock exchange
   4. the disposal of VCT shares are potentially liable to CGT at 18%

4. Which of the following statements is a drawback of using the multiple of salary basis to calculate the amount of key person insurance required by a company?
   1. It does not take account of the key person’s age
   2. It can only be based on a multiple of 5
   3. It is only loosely related to the key person’s contribution to profits
   4. It only takes a short-term time factor into account

5. The investment strategy that aims to achieve high returns by going against the trend is known as:
   1. contrarianism
   2. value
   3. GAARP
   4. momentum

Answers

1. D – See R01 Study Text, Chp 4 Section D3
   Grab our taster mock exam paper for CII R01. Click here to download.

2. B – See J10 Study Text, Chp 9 Section C3
   Grab our taster mock exam paper for CII J10. Click here to download.

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

4. C – See R05 Study Text, Chp 10.2 Section H3A
   Grab our taster mock exam paper for CII R05. Click here to download.

5. A – See J12 Study Text, Chp 4 Section F1
   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!)