Friday Five – 6 April – 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. Under which scenario would non-disclosure have taken place?
   1. A client tells an IFA about a previous heart condition, but the IFA doesn’t tell the insurer
   2. An employed agent of the insurer does not inform the insurer of the client’s previous heart condition
   3. A self-employed agent of the insurer does not pass onto the insurer a material fact the client had disclosed
   4. The client advised that a previous heart condition occurred 10 years ago, but had actually happened 11 years ago

2. Which of the following scenarios would be potentially taxable?
   1. Steven opens a bank account in his son’s name which earns £80 interest
   2. Stefan, aged 12, earns £30 per week delivering newspapers
   3. Simon opens a building society account for his grandson which earns £110 interest
   4. Sarah, aged 16, receives money from her parents and invests it in a cash ISA where it earns £115 interest

3. As a new member of a private sector defined benefit scheme, the accrual of Mary’s tax-free cash sum at retirement will be:
   1. determined by the scheme rules.
   2. 3/80 x salary x years of service.
   3. 3/80 x fund x years of service.
   4. 25% x fund value.

4. Jack, who is married to Vera, has an endowment policy approaching maturity. The life office’s form of discharge can be signed by:
   1. Jack or his solicitor
   2. Jack or Vera
   3. Jack or anyone appointed by him
   4. Jack only

5. The following statistics relate to the Franklin Fund Management Group Ltd.’s ‘Technology and Telecommunications Fund’: average return 10% per year, beta 2, return on the market 7% and risk-free rate 3%. Given this information, what is the alpha of this particular fund?
   1. 3
   2. 1
   3. -3
   4. -1

Answers

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

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

5. D – See J10 Study Text, Chp 9
   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!)