Friday Five Focus on Investments – 3 June – 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 2021/22, examinable by the CII until 31 August 2022. They do not relate to tax year 2022/23 which is only examinable by the CII from 1 September 2022.

1. Which of the following is used generically to describe ethical investment?
   1. Globally responsible investment
   2. Negative screening
   3. Socially responsible investment
   4. Environmental lending

2. Andrew has recently been through the fact-finding process with his financial adviser; what is the most important outcome of this process?
   1. Completion of a printed questionnaire
   2. A clear understanding of the client’s goals and their expectations
   3. Gaining Andrew’s trust to allow them to express true facts
   4. Obtaining ‘hard’ information and ‘soft’ facts

3. Which of the following are reasons why it is regarded as essential to understand how individual investments, portfolio sectors and markets have performed in the past? Tick all that apply.
   1. To confidently predict future returns
   2. To assess the competence of fund managers
   3. To reward investment managers
   4. To understand investments markets generally

4. If Colin adopts a tactical approach to asset allocation instead of a strategic approach, one disadvantage he might encounter is that:
   1. volatility of the portfolio could become higher than originally intended.
   2. his clients’ risk tolerance and capacity could change.
   3. the portfolio may fail to meet the clients’ overriding objectives.
   4. the economy might present different investment opportunities.

5. The FTSE100 is made up of the 100 largest companies by capitalisation. How often is membership revised?
   1. Monthly
   2. Quarterly
   3. Six monthly
   4. Annually

Answers

1. C – See R02 Study Text, Chp 9
   Grab our taster mock exam paper for CII R02. Click here to download.

2. B – See R02 Study Text, Chp 9
   Grab our taster mock exam paper for CII R02. Click here to download.

3. BCD – See R02 Study Text, Chp 11
   Grab our taster mock exam paper for CII R02. Click here to download.

4. A – See J10 Study Text, Chp 5
   Grab our taster mock exam paper for CII J10 Click here to download.

5. B – 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?

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