Friday Five Focus on Investments – 6 October – 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. Which of the following would be justifiable reasons to switch an investment? (Tick all that apply)
   1. A higher fee is achievable on an alternative product.
   2. There is a clear change in the client objective or circumstances.
   3. The client gives clear instructions to carry out a switch.
   4. The fund has fallen to third quartile over the last month.

2. Max is considering investing in NS&I Savings Certificates. He should be aware that
   1. interest is paid gross but is taxable.
   2. they are currently available by online application only.
   3. interest is paid net of income tax on a monthly basis.
   4. they are currently only available to those with maturing certificates.

3. The intention behind the government’s quantitative easing programme was to
   1. reduce inflation.
   2. bring liquidity to the financial markets.
   3. restrict banks’ ability to lend money.
   4. reduce the money supply.

4. Anna, your client, has been identified as having an adventurous risk profile and as such requires 75% of her portfolio in equities. You have decided to place half of this in large cap and half in small cap; this is an example of
   1. strategic asset allocation.
   2. portfolio rebalancing.
   3. momentum based strategy.
   4. tactical asset allocation.

5. What is the maximum protection available from the Financial Services Compensation Scheme for investments?
   1. £100,000
   2. £95,000
   3. £85,000
   4. £50,000

Answers

1. BC – See R02 Study Text, Chp 10
   Grab our taster mock exam paper for CII R02. Click here to download.

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

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

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

5. C – See J10 Study Text, Chp 9
   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.