Friday Five – 5 July – 5 Questions in 5 Minutes
Last updated on September 25th, 2019 at 4:14 am
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.
IMPORTANT! These questions relate to examinable tax year 2018/19, examinable by the CII until 31 August 2019. They do not relate to tax year 2019/20 which is only examinable by the CII from 1 September 2019.
- If a client said that all of their current investments were in emerging market funds, what might this indicate to the adviser?
- That the client was considering retiring abroad
- That the client has little confidence in the UK stock market
- That the client was reckless
- That the client has an adventurous attitude to risk
- Julie has two investments correlated as follows:
If investment A falls by 6% what is most likely to happen to investment B?
Investment A Investment B Investment A 1.0 -0.3 Investment B -0.3 1.0
- It will fall by 3%.
- It will fall by 1.8%.
- It will rise by 1.8%.
- It will rise by 3%.
- Adrian transferred assets worth £150,000 into a trust, in which he has no interest. If he had sold the assets he would have made a gain of £40,000. If holdover relief was claimed what effect would it have on the trust?
- Holdover relief is not available as the value of the gift is below the nil rate band.
- There is no CGT at the time of the transfer, but the acquisition cost of the trust is reduced to £110,000.
- Adrian has no immediate CGT liability, but he would be liable to CGT on the trust’s periodic review.
- The gain is liable to CGT by the trust at acquisition and not on Adrian at disposal.
- Bill is eligible to receive an element of the State Graduated Pension Scheme at retirement, since he:
- was contracted out of SERPS/S2P.
- was self-employed throughout his working life.
- retired before 1961.
- was employed in 1971.
- A life office is making a payment to a policyholder on the surrender of a life assurance policy that involved a chargeable gain. How will the life office pay the proceeds?
- After deduction of basic rate income tax only
- After deduction of any tax due
- Gross but with a tax invoice for the amount due
- Without deduction of any tax due
- D – See R01 Study Text, Chp 8
Grab our taster mock exam paper for CII R01. Click here to download.
- C – See R02 Study Text, Chp 3
Grab our taster mock exam paper for CII R02. Click here to download.
- B – See R03 Study Text, Chp 3
Grab our taster mock exam paper for CII R03. Click here to download.
- D – See R04 Study Text, Chp 1
Grab our taster mock exam paper for CII R04. Click here to download.
- D – See R05 Study Text, Chp 5
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?
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