Friday Five – 7 August 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 2014/15, examinable until 31 August 2015.

1. Indices are usually adjusted for the ‘free float’ of a stock. What is the ‘free float’?
   1. The number of shares available for trading on the stock market
   2. The number of shares held by controlling directors
   3. The number of large cross holdings available
   4. The number of shares held by the government

2. John has a defined contribution AVC, whereas Tom’s AVC is on an “added years” basis. In which area, will Tom’s arrangement differ from John’s?
   1. Tax relief on contributions.
   2. Some of the benefit can be in the form of tax free cash.
   3. Minimum pension age.
   4. Inability to draw the benefit independent of the main scheme.

3. What is a difference between a local authority bond and a corporate bond?
   1. Corporate bonds pay interest net of 20% tax
   2. Interest received from a local authority bond is fully taxable as savings income
   3. In certain circumstances losses may be allowable for corporate bonds
   4. A corporate bond pays interest for a fixed term and repays the capital at maturity

4. Norma is about to start receiving benefits from her income protection policy. How will the payments be made to her?
   1. Gross but liable for income tax at her appropriate rates
   2. After the deduction of income tax at her appropriate rates
   3. After the deduction of income tax at basic rate
   4. Gross with no liability for income tax

5. What are the FCA Principles for Businesses?
   1. Guidelines issued by the FCA to all authorised firms
   2. Statements of the fundamental obligations of all authorised firms
   3. The basis behind many of the FCA rules
   4. Management control systems for authorised firms

Answers

1. A – See J10 Study Text, Chp 9 Section A2A
   Grab our taster mock exam paper for CII J10. Click here to download.

2. D – See R04 Study Text, Chp 4.1 Section A2A
   Grab out taster mock exam paper for CII R04. Click here to download.

3. C – See R03 Study Text, Chp 9 Section A4B
   Grab our taster mock exam paper for CII R03. Click here to download.

4. D – See R05 Study Text, Chp 6 Section G
   Grab our taster mock exam paper for CII R05. Click here to download.

5. B – See R01 Study Text, Chp 9 Section A1
   Grab our taster mock exam paper for CII R01. 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!)

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