Friday Five Focus on Investments – 10 March – 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 2022/23, examinable by the CII until 31 August 2023.
- Caroline invested £12,000 into a unit trust which was worth £18,020 after 6 years. What compound rate of return has she achieved?
- 7.01%
- 5.01%
- 6.21%
- 6.72%
- What is it called when instead of a government stepping in to help a financial institution in trouble the help comes from the institution’s shareholders?
- Bail-in risk.
- Currency risk.
- Event risk.
- Bail-out risk.
- Which of the following best describes a ‘synthetic’ passive fund?
- An exchange traded fund that uses derivatives to match an index.
- An index-tracking fund that tracks a specialist index.
- An exchange traded fund that holds stocks to replicate an index.
- A socially responsible index-tracking fund.
- Joseph and Rebecca have set up a trust for the benefit of their grandchildren. Which of the following Acts imposes a duty on them in their capacity as trustees to have regard to the need for diversification and suitability of investments?
- The Trustee Act 2000.
- The Trustee Act 1925.
- The Trustee Investments Act 1961.
- The Trustee Investments Act 2000.
- Alpha is the difference between the return that would be expected from a security given its beta and the return that is actually produced. Alpha therefore represents the
- volatility of the fund independent of the market.
- market related return.
- return independent of the market return.
- volatility of the market.
Answers
- A – See R02 Study Text, Chp 5
Grab our taster mock exam paper for CII R02. Click here to download.
- A – See R02 Study Text, Chp 6
Grab our taster mock exam paper for CII R02. Click here to download.
- A – See R02 Study Text, Chp 10
Grab our taster mock exam paper for CII R02. Click here to download.
- A – See J10 Study Text, Chp 6
Grab our taster mock exam paper for CII J10 Click here to download.
- C – See J10 Study Text, Chp 11
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?
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