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 23/24, examinable by the CII until 31 August 2024.
You will find the answers separately under the Development Zone tab on the Professional Paraplanner website HERE.
Questions
1. A firm is required to produce a suitability report for a retail client, if they make a personal recommendation to a UK-based retail client that they (Tick all that apply.)
A. take income withdrawals from a pension contract.
B. Increase regular contributions on their OEIC.
C. obtain a BR19 forecast.
D. suspend regular contributions on their pension.
2. The intention behind the government’s quantitative easing programme was to
A. reduce inflation.
B. bring liquidity to the financial markets.
C. restrict banks’ ability to lend money.
D. reduce the money supply.
3. Sharon has made gross pension contributions of £20,000 in this tax year. She has a share of partnership profits of £100,000 and paid interest of £60,000 on a loan taken out to finance the partnership. How much of the loan interest can be deducted for tax relief purposes?
A. £20,000
B. £30,000
C. £50,000
D. £60,000
4. The International Accounting Standards 19 (IAS 19) laid down a requirement for defined benefit schemes that any scheme surplus or deficit must be shown on the company
A. balance sheet and the present value of past service liabilities should reflect equity yields rather than high quality bond yields.
B. profit and loss account and the present value of past service liabilities should reflect high quality bond yields rather than equity yields.
C. balance sheet and the present value of past service liabilities should reflect high quality bond yields, rather than equity yields.
D. profit and loss account and the present value of past service liabilities should reflect equity yields, rather than high quality bond yields.
5. Terminal illness benefit on a critical illness plan is NOT usually paid out in the last
A. 12 or 18 months of a policy.
B. 18 or 24 months of a policy.
C. 24 or 30 months of a policy.
D. 30 or 36 months of a policy.
6. Jordan feels that Modern Portfolio Theory doesn’t really fit with the real world as he sees it. He prefers to take the pragmatic approach to asset allocation because pragmatists tend to use
A. historical data to reduce risk within an investment portfolio.
B. the efficient frontier to create the optimal portfolio.
C. the historic range of returns to estimate future returns.
D. asset allocation as a defensive strategy in order to preserve capital.
7. An investor holds a long-term Japanese Government bond. This tells us that the bond has a maturity of how many years?
A. 5
B. 10
C. 20
D. 30
8. Which of the following categories of income is fully disregarded for care contribution assessment purposes?
A. Capital withdrawals from a capital investment bond.
B. Income from a Permanent Health Insurance policy.
C. Income from a mortgage protection policy.
D. Attendance Allowance.
9. Dolores, aged 70, is single and owns a property valued at £400,000. She has a good level of pension income, which is index linked. If she takes out a lifetime mortgage for £75,000 and gifts the proceeds to her three nephews and nieces, which tax is she potentially avoiding?
A. Inheritance Tax.
B. Capital Gains Tax.
C. Council Tax.
D. Income Tax.
10. Simon’s firm is an intermediary specialising in mortgage advice. They do NOT need professional indemnity insurance. This is most likely because
A. they do not deal with client money.
B. they all hold the Certificate in Mortgage Advice.
C. their liabilities have been guaranteed by their parent company.
D. they have a stock market capitalisation in excess of £10 million.
