Friday Five Focus on Investments – 5 July – 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. Ahmed is an additional rate taxpayer. He is investing £20,000 into a new equity fund held within a stocks and shares ISA. If the fund pays an income of 3.8% in the first year, Ahmed will receive
   1. £760.00
   2. £703.00
   3. £608.00
   4. £470.44

2. David is keen to reduce the risk within his investment portfolio; he could achieve this
   1. by hedging and diversification of his holdings.
   2. by using correlation and standard deviation techniques.
   3. through systematic and non-systematic risk applications.
   4. by utilising efficient frontier theory and risk ratios.

3. Providers of investment trust savings schemes must provide investors with a
   1. product information document (PID).
   2. key information document (KID).
   3. packaged retail information document (PRID).
   4. key facts document (KFD).

4. Which of the following would be considered one of the key areas of information to be obtained from a client’s fact-find?
   1. Family history.
   2. Childhood diseases.
   3. Assets and liabilities.
   4. Hazardous sports.

5. Investors in which asset classes are usually most affected by inflation?
   1. Equities and cash.
   2. Property and equities.
   3. Cash and fixed interest.
   4. Fixed interest and property.

Answers

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

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

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

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

5. C – See R02 Study Text, Chp 6
   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.