Friday Five – 8 June – 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. Why would a client who has a history of small regular savings arouse suspicion if he proposed a substantial investment to his IFA?
   1. It might indicate that there had been missed opportunities within the client’s fact find
   2. It might affect the client’s existing estate planning recommendations
   3. It is inconsistent with the IFA’s previous knowledge and experience of the client
   4. It might imbalance or jeopardise the client’s overall portfolio

2. Why is the market price for “A” ordinary shares usually lower than ordinary shares?
   1. They rank behind ordinary shareholders in the event of liquidation
   2. They do not qualify for dividends until the dividends on ordinary shares have reached a pre-determined level
   3. Holders of ‘A’ shares are entitled to a smaller proportion of profits than ordinary shareholders
   4. Holders of ‘A’ shares receive the same dividend but have restricted or no voting rights

3. As a financial adviser, which of the following individuals would you advise if possible to pay Class 3 National Insurance Contributions? Tick all that apply.
   1. Jane, who took early retirement at 50 having established 32 years of NICs
   2. Peter, aged 66, with an inadequate NIC record to qualify for a full State pension
   3. Hayley, who is moving to Portugal for a year, after selling the UK-based business she owned for 10 years
   4. Mary, who has an incomplete NIC record after taking the last 2 years off to study

4. In assessing her eligibility for State Pension Credit, Molly has declared savings of £14,000. This means that, on this information alone, she will:
   1. be unable to claim any Pension Credit.
   2. be assumed to have, from own sources, a weekly income of £8.
   3. be assumed to have, from own sources. a weekly income of £14
   4. be assumed to have, from own sources, a weekly income of £28.

5. Which of the following should be disregarded by a Local Authority when assessing an individual’s capital and income?
   1. The fund value of a pension fund
   2. A pension commencement lump sum taken from a pension fund
   3. Deferred income from pension benefits
   4. An uncrystallised funds pension lump sum

Answers

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

2. D – See R02 Study Text, Chp 1:2
   Grab our taster mock exam paper for CII R02. Click here to download.

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

4. B – See R04 Study Text, Chp 7
   Grab our taster mock exam paper for CII R04. Click here to download.

5. A – See CF8 Study Text, Chp 3
   Grab our taster mock exam paper for CII CF8. 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!)