Professional Paraplanner’s Development zone is run in conjunction with key support providers, such as Brand Financial Training, and aims to test your knowledge of the financial services market, as part of your overall training goals and exam techniques.
The following questions relate to examinable Tax year 21/22, 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. The overriding purpose of the Remuneration Code is to ensure that
A. people are remunerated in a consistent manner across all financial services sectors.
B. the national living and minimum wage requirements are being met.
C. firms establish, implement and maintain remuneration policies consistent with effective risk management.
D. senior managers and certified individuals are held accountable for all spending within their businesses.
2. A buy-to-let investor should be aware that liquidity is a drawback of property investment because property (Tick all that apply)
A. is difficult to value.
B. is only available across a narrow range.
C. is expensive to trade.
D. can be difficult to sell.
3. Kayleigh, an additional rate taxpayer, Jo a higher rate taxpayer and Edna, a nontaxpayer, have all received a £1,000 interest distribution from their unit trust investment. None of them has any other savings or dividend income. With regards to these payments, which of the following statements are true? Tick all that apply.
A. Only Kayleigh will pay tax on the full £1,000.
B. Only Edna can arrange to have her distribution paid gross.
C. Any unused dividend allowance can be offset against the payment.
D. Jo’s tax bill will be £200, whereas Kayleigh’s will be £450.
4. Tom has recently declared himself bankrupt. Once a bankruptcy order is made, who will be appointed to administer Tom’s estate?
A. Trustee in Bankruptcy.
B. Administrator.
C. Personal representative.
D. Legal executive.
5. Hansen Trading is taking out a key person policy on the life of Henry Smith their top salesperson. Which of the following statements most CORRECTLY describes how the policy will be written?
A. Hansen Trading will be proposer and Henry Smith the owner and life assured
B. Henry Smith will be the proposer, owner and the life assured
C. Henry Smith will the proposer and life assured and Hansen Trading the owner
D. Hansen Trading will be the proposer and owner and Henry Smith the life assured
6. Caren has savings in her local building society of £100,000. She feels that cash is the only safe place for her money and is fearful of the stock market. You explain to her that, in fact, her savings are exposed to each of the following risks with the exception of
A. inflation risk.
B. investment risk.
C. default risk.
D. interest rate risk.
7. The only institutions eligible to submit competitive bids directly to the DMO are
A. primary-edged market makers.
B. secondary-edged market makers.
C. gilt-edged market makers.
D. debt-edged market makers.
8. Which of the following provides support mainly in the form of benevolent funds?
A. Professional bodies
B. Employers
C. Trade unions
D. Commercial organisations
9. Affordability must be considered for
A. home reversion plan customers only.
B. drawdown lifetime mortgage customers.
C. lifetime mortgage customers considering a product that requires payments to the lender.
D. all equity release customers.
10. Brian and June are re-mortgaging their £200,000 interest only mortgage which they will have for the next 15 years. They have been offered a 2 year fixed rate of 3.7% with no booking fee or 3.5% with a £1,000 booking fee. Which of the following is true?
A. The fee cannot normally be added to the loan.
B. They will be better off accepting the 3.7% rate.
C. They will be better off accepting the 3.5% rate with a booking fee.
D. It is always better to pay a fee and a lower interest rate.
