Friday Five Focus on Investments – 3 May – 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. They do not relate to tax year 2024/25 which is only examinable by the CII from 1 September 2024.

1. The FTSE 100 is an arithmetically weighted index based on
   1. size of the company.
   2. share price movements.
   3. number of shares of company.
   4. market capitalisation of each company.

2. Which of the following would benefit a UK company that exports most of its goods to the USA?
   1. High inflation.
   2. A weak pound against the dollar.
   3. A strong pound against the dollar.
   4. Low interest rates.

3. Jerome has recently been advised to invest in an index-tracking fund. The most likely reason his adviser has recommended this is to
   1. provide Jerome with a fixed regular income.
   2. achieve potential outperformance of the market.
   3. avoid exposure to socially irresponsible companies.
   4. mirror an index with no extra risk pursuing outperformance.

4. When making an initial financial future trade, a client has ongoing rights or obligations to the market. What is this known as?
   1. Open position.
   2. Marking to market.
   3. Initial margin.
   4. Variation margin.

5. One result of an ageing UK population is that
   1. a declining proportion of wealth is spent on manufactured goods.
   2. there is lower average wealth due to increased longevity.
   3. demand for services diminishes as people become richer.
   4. gross domestic product (GDP) falls within the banking and insurance sectors.

Answers

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

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

3. D – See R02 Study Text, Chp 7
   Grab our taster mock exam paper for CII R02. Click here to download.

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

5. A – See R02 Study Text, Chp 3
   Grab our taster mock exam paper for CII R02. 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.