Friday Five – 9 October – 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 2015/16, examinable until 31 August 2016.

1. What would be considered the main limitations of using an index when comparing the performance of a portfolio? Tick all that apply.
   1. Investors would need to pay a subscription fee in order to be kept up to date with relevant indices
   2. Market capitalisation means a few large companies can have a substantial effect on the market
   3. Most indices only reflect changes in capital values
   4. Investors are unable to access information about indices directly, information is only available to stockbrokers

2. Harry has received £150 interest from his savings account and has been advised that basic rate tax has been deducted. Although both net and gross figures are put on his tax return, which figure will be used to calculate his tax liability?
   1. £187.50
   2. £180.00
   3. £165.00
   4. £150.00

3. Which of the following are true statements regarding the regulation of stakeholder pensions? Tick all that apply.
   1. The scheme must be registered with the Pensions Ombudsman.
   2. The Pensions Regulator is responsible for regulating registration compliance.
   3. The PRA regulates the marketing of schemes.
   4. The FCA supervises the firms responsible for managing the funds.
   5. The scheme must have HMRC approval to meet conditions for tax relief.

4. Jane was recently made redundant and is currently receiving Jobseekers Allowance (JSA). If she receives support for mortgage interest, it will be:
   1. Paid after 13 weeks for a maximum of 2 years
   2. Paid after 39 weeks and paid until she finds new employment
   3. Paid after 26 weeks for interest on mortgages up to £100,000
   4. Paid after 8 weeks on any amount of mortgage

5. Moody’s have recently changed the credit rating of a bond from Aaa to Baa. What can we now say about this bond?
   1. The bond is now non-investment grade
   2. The bond is now a junk bond
   3. The bond has kept an investment grade
   4. The bond’s rating has increased to the highest quality

Answers

1. B,C – See R02 Study Text, Chp 1:2 Section C6E
   Grab our taster mock exam paper for CII R02. Click here to download.

2. A – See R03 Study Text, Chp 1 Section B1C
   Grab our taster mock exam paper for CII R03. Click here to download.

3. B, D, E – See R04 Study Text, Chp 5 Section E2A
   Grab our taster mock exam paper for CII R04. Click here to download.

4. A – See R05 Study Text, Chp 3 Section E
   Grab our taster mock exam paper for CII R05. Click here to download.

5. C – See J12 Study Text, Chp 2 Section F2
   Grab our taster mock exam paper for CII J12. 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!)