Friday Five – 5 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 2015/16, examinable by the CII until 31 August 2016. They do not relate to tax year 2016/17 which is only examinable by the CII from 1 September 2016.

1. In which of the following circumstances would the powers granted under an ordinary Power of Attorney not be revoked?
   1. In the event of mental incapacity
   2. If the donor leaves the country
   3. In the event of bankruptcy
   4. In the event of death

2. How does Stochastic Modelling provide a guide to future portfolio returns?
   1. Through utilising a historic range of returns to estimate the maximum and minimum returns that could be earned in the future
   2. Through mathematical techniques that generate probable returns based on assessments of returns and volatility
   3. Through a matrix of sample portfolios all of which have different proportions of assets
   4. Through mathematical techniques and analysis to determine the risk/return trade-off

3. Kevin is a cautious investor but would like to benefit from the potential returns from property. Which of the following might mean he prefers to do this through an insurance company property fund rather than through a Real Estate Investment Trust (REIT)?
   1. The insurance fund should be a lower risk as they cannot utilise gearing
   2. He would rather be in a pooled investment with other investors
   3. He wants to avoid the 6-month potential deferral period on encashment
   4. He wants to utilise his Capital Gains Tax exempt amount on encashment

4. Which of the following are individual defined contribution schemes? Tick all that apply
   1. SIPP.
   2. Group Stakeholder.
   3. Retirement annuity contract.
   4. Final salary scheme.
   5. SSAS.

5. Where an employer takes out group critical illness cover for their employees, what age restrictions are normally within the eligibility criteria?
   1. Between 18 and 65
   2. Between 18 and 60
   3. Between 21 and 65
   4. Between 21 and 60

Answers

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

2. B – See R02 Study Text, Chp 8, Section B3
   Grab our taster mock exam paper for CII R02. Click here to download.

3. A – See R03 Study Text, Chp 10, Section I4
   Grab our taster mock exam paper for CII R03. Click here to download.

4. ABC – See R04 Study Text, Chp 5, Section A1
   Grab our taster mock exam paper for CII R04. Click here to download.

5. C – See R05 Study Text, Chp 7, Section G
   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!)