Friday Five – 5 January – 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 2017/18, examinable until 31 August 2018.

1. Which of the following statements regarding bonds is true?
   1. Interest earned on a bond is lower than that earned from a bank
   2. Bonds allow private investors to borrow from a company in exchange for interest
   3. Bonds are in the form of high interest loans with no capital repayment
   4. Bonds allow companies to raise money without having to borrow from a bank

2. Robert is 48 and has total earnings of £10,000 and gross interest from his building society account of £4,000. What is his total income tax liability in this tax year?
   1. £0
   2. £300
   3. £500
   4. £700

3. The Pension Protection Fund (PPF) was introduced to provide default protection for whom?
   1. Employees who are members of defined benefit schemes.
   2. Pensioners retiring on an inadequate level of benefits.
   3. Anyone who had elected to opt out of earnings related State benefits.
   4. Anyone who has been mis-sold a pension product.

4. George, a key person of Romulus Ltd is currently off work after an accident and receiving an income from an income protection plan taken out by his employer. How are the benefits from the policy treated in relation to the company’s taxation?
   1. They are taxable only if they exceed £1,000 per month
   2. They are free from any liability for tax
   3. They are paid as a regular income and therefore taxable
   4. Any excess over £1,000 per month is taxable

5. Which of the following categories of inflation is characterised by the economy operating beyond its full employment level of output resulting in an inflationary gap emerging?
   1. Cost-push inflation
   2. Cost-pull inflation
   3. Demand-push inflation
   4. Demand-pull inflation

Answers

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

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

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

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

5. D – See R05 Study Text, Chp 6
   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!)