Whether you are preparing for your exams, or simply want to keep your knowledge up-to-date, Professional Paraplanner’s Development Zone can help.
Every month, in conjunction with Brand Financial Training, we provide a series of questions from across the syllabus which aim to test your knowledge of the financial services market, as part of your overall self development training goals and exam techniques.
The following questions relate to examinable Tax year 22/23, examinable by the CII until 31 August 2023.
You will find the answers separately under the Development Zone tab on the Professional Paraplanner website.
Questions
1. What is required in order for a firm to qualify for exempt status?
A. It must be contracted to an authorised person responsible for their activities.
B. A firm would gain exempt status if it merely acted as an introducer.
C. The firm must be comprised entirely of appointed representatives.
D. The firm must be a specialist firm selling protection and savings products.
2. When applying the information ratio (IR), which of the following factors are used in the formula? (Tick all that apply)
A. Fund return.
B. Benchmark return.
C. Beta.
D. Tracking error.
3. Pauline died on 1 October 2022. Who will be responsible for the payment of any Inheritance Tax due on her estate and when is it payable?
A. Pauline’s legal personal representatives must pay any tax due by 30 April 2023.
B. Pauline’s next of kin must pay any tax due by 5 April 2023.
C. Pauline’s beneficiaries must pay any tax due by 5 April 2023.
D. Pauline’s trustees must pay any tax due by 1 October 2023.
4. After discussion with his financial adviser, Robert is transferring his personal pension to another provider. During these discussions, his adviser would have taken account of a number of factors when determining the suitability of the transfer. Robert should be aware that these would have included: (Tick all that apply.)
A. his current inheritance tax position
B. whether there is a transfer penalty
C. the current economic outlook
D. a comparison of charges on both schemes
5. Which of the following statements CORRECTLY defines the pure or net premium calculated for life assurance policies by actuaries from mortality tables?
A. The premium required just to meet the claims of those who die during the year
B. The actual premium that will be paid by the policyholder
C. The premium for all policyholders in good health
D. The premium required to meet claims each year including an assumed interest rate of 5%
6. The foreign exchange markets allow the currency used by one country to be purchased and paid for with the currency of another at an exchange rate. A country’s ‘real exchange rate’ measures
A. the daily price at which two currencies trade on the foreign exchange market.
B. the price of domestic goods relative to foreign goods prices, taking into account the exchange rate.
C. an indication of how competitive a country is with Europe.
D. the effective exchange rates between different countries’ currencies with no adjustment for inflation.
7. The market price for ‘A’ ordinary shares is usually lower than ordinary shares because they
A. rank behind ordinary shareholders in the event of liquidation.
B. do not receive dividends until those paid on ordinary shares have reached a certain level.
C. are entitled to a smaller proportion of profits.
D. are typically non-voting shares.
8. Who has the authority to execute a statutory will for a person lacking mental capacity?
A. The Office of the Public Guardian
B. A Court appointed Deputy acting for the mentally incapacitated person
C. The Court of Protection
D. The Mental Health Commission
9. Daphne took out a full Home Reversion Plan some years ago and now wants her daughter to move in with her as a full-time carer. Will this be possible under the terms of her plan?
A. Never in any circumstances
B. Yes, without restriction
C. Only if her contract allows occupancy by people not party to the lease
D. Only if the daughter has a Lasting Powers of Attorney in place
10. Sam and Brian are looking into the Government’s Help to Buy equity loan scheme to purchase a property in London. What factor prevents them from being eligible to use it?
A. They intend to sublet the property.
B. They are home movers rather than first-time buyers.
C. The property is a new build rather than an existing property.
D. The property is valued at £450,000.
