Friday Five – 7 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 2019/20, examinable by the CII until 31 August 2020. They do not relate to tax year 2020/21 which is only examinable by the CII from 1 September 2020.

1. What does the ‘general prohibition’ rule within s.19 of the FSMA refer to?
   1. The fact that intermediaries are generally restricted to certain activities
   2. It is an offence for someone to carry out a regulated activity unless the person is authorised or exempt
   3. The FCA will seek to stop unauthorised individuals working within the financial services sector
   4. The powers granted to the FCA by the FMSA in relation to authorising individuals

2. Why is credit risk an important factor to consider when looking at structured products?
   1. The credit worthiness of the issuer and any counterparties might affect the ability to repay at maturity.
   2. The client needs to consider the costs and fees associated with buying, holding, and selling the structured product.
   3. It is essential to determine the extent to which the investor will capture any upward movements in the market.
   4. The lack of an established secondary market means investors are unable to trade the products.

3. Which of the following is most likely to be classed as a gift with reservation for IHT purposes by HMRC?
   1. Simon gives away his holiday home to his sister but continues to stay there paying full market rent.
   2. Elaine gives away her antique jewellery to her daughter but cleans it annually.
   3. Edmond gives his son his share portfolio but retains the right to dividends from it.
   4. Andrea gives her antique chairs to her brother but always sits on them when she visits.

4. A PPF Section 179 valuation is to establish the:
   1. future value of a defined benefit scheme.
   2. level of defined benefit scheme assets and liabilities.
   3. number of deferred members of a defined benefit scheme.
   4. basis of funding guidance for a defined benefit recovery plan.

5. 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.

Answers

1. B – See R01 Study Text, Chp 6
   Grab our taster mock exam paper for CII R01. Click here to download.

2. A – See R02 Study Text, Chp 6:2
   Grab our taster mock exam paper for CII R02. Click here to download.

3. C – See R03 Study Text, Chp 4
   Grab our taster mock exam paper for CII R03. Click here to download.

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

5. D – See R05 Study Text, Chp 4
   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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