Friday Five Focus on Investments – 1 September – 5 Questions in 5 Minutes

Friday Five Focus on Investments – 5 Questions in 5 Minutes Every Friday

What’s this all about?

Each week, we ask questions relating to one of these topics: Investments, Taxation, Pensions, Protection, or Regulation. This week, our Friday Five is relevant to Investments; this is useful as you prepare for any of the CII’s R02, AF4, or J10 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 2023/24, examinable by the CII until 31 August 2024.

1. Hans holds preference shares in a listed company. Which of the following statements are true regarding his holding? (Tick all that apply)
   1. Dividends are usually paid half-yearly.
   2. He will have voting rights like ordinary shareholders.
   3. Ordinary shareholders dividends are paid before preference shareholders.
   4. They usually pay a fixed rate of dividend.

2. Pauline is the holder of a financial option. The choices available to her are that she can (Tick all that apply.)
   1. sell the option.
   2. exercise the option.
   3. buy the option.
   4. let the option expire worthless.

3. If the net present value (NPV) of rent payable under a lease is calculated as £100,000 for a residential property, what rate of Stamp Duty Land Tax is payable?
   1. 0%
   2. 1%
   3. 2%
   4. 3%

4. The client’s personal opinion on the risks associated with making an investment, based on their prior knowledge and experience’ is describing risk
   1. tolerance.
   2. profile.
   3. capacity.
   4. perception.

5. Lydia and Marnie are both named as beneficiaries under a trust. If Lydia is the life tenant and Marnie is entitled to the capital from the trust once Lydia’s interest has ended, Marnie is called the
   1. contingent beneficiary.
   2. default beneficiary.
   3. remainderman.
   4. reversionary tenant.

Answers

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

2. ABD – See R02 Study Text, Chp 8
   Grab our taster mock exam paper for CII R02. Click here to download.

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

4. D – See J10 Study Text, Chp 1
   Grab our taster mock exam paper for CII J10 Click here to download.

5. C – See J10 Study Text, Chp 6
   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?

If you found this quiz useful for your CII exam revision, please do share it with your colleagues.