Every month Professional Paraplanner teams up with Brand Financial Training to provide a series of questions from across the CII syllabus to test your knowledge.
Whether you are preparing for your exams, or simply want to keep your knowledge up-to-date, Professional Paraplanner’s Development Zone can help.
These questions relate to examinable Tax year 25/26, examinable by the CII until 31 August 2026.
You will find the answers separately under the Development Zone tab on the Professional Paraplanner website.
We hope you find our Q&A useful in achieving your qualifications.
QUESTIONS
1. Which of the following categories of mortgage firm would normally need regulating by the Financial Conduct Authority?
A. ii and iv only.
B. i and ii only.
C. ii and iii only.
D. i, iii and iv only.
2. A fund has an average return of 10% per year and a beta of 1.4. This compares to the return on the market of 6% and a risk-free rate of 1.5%. From this information we can say that (Tick all that apply.)
A. the fund’s alpha is 2.2%.
B. the fund’s Sharpe ratio is 0.60.
C. alpha is the part of the return which cannot be explained by movements in the overall market.
D. a positive alpha indicates that the security has performed better than would be predicted given its information ratio.
3. Desmond, a long-term resident in the UK and a higher-rate taxpayer, is the settlor of an offshore trust where the trustees have made a £25,000 capital gain in this tax year. Which of the following statements regarding any Capital Gains Tax liability are correct? (Tick all that apply.)
A. Desmond is liable but only if he has an interest in the trust.
B. Desmond is liable if he is UK resident this tax year and has an interest in the trust.
C. Desmond would not be liable if the trust was created after 6 April 1999.
D. If Desmond is chargeable he will pay Capital Gains Tax at a rate of 24%.
4. The Trustees of a defined benefit pension scheme have developed a recovery plan for the scheme. This would indicate that the scheme
A. is in deficit.
B. was contracted out of the State Second Pension (S2P).
C. has been taken over by the Pension Protection Fund (PPF).
D. is changing the benefit structure.
5. In quantifying the protection needs of a client on death, the first consideration should be
A. Capital to make lifestyle changes.
B. Income for dependants in the long term.
C. Capital to settle liabilities.
D. Income for dependants in the short term.
6. John purchased 6% Treasury Stock at a clean price of £118.55. If there are five years to redemption, we can say that the interest yield is
A. 5.06% and the gross redemption yield is 6.00%.
B. 5.06% and the gross redemption yield is 1.93%.
C. 6% and the gross redemption yield is 3.71%.
D. 6% and the gross redemption yield 3.13%.
7. A company is showing £94,000 on its statement of financial position as an amount owed to its suppliers within 12 months of the statement date. This is normally understood to represent the company’s
A. non-current assets.
B. current liabilities.
C. current assets.
D. non-current liabilities.
8. How do the powers under a deputyship differ from the powers under a Lasting Power of Attorney?
A. They are broadly the same.
B. A deputyship is less restrictive as deputies are normally legally qualified persons.
C. A deputyship is more restrictive in that the approval of the court is required for some decisions.
D. A deputyship is more restrictive in that the approval of the court is needed for every decision.
9. A core focus of the Equity Release Council (ERC) is to
A. ensure that equity release products are safe and accessible for consumers.
B. bring about outcomes that are in the best interest of the consumer and the lender.
C. ensure that interest rates charged do not alter during the term of their plan.
D. ensure a compulsory set of principles is adhered to in order to improve outcomes for customers.
10. Daniel is single with no financial dependants. Due to having been made redundant two months ago, he is currently unemployed. He is, however, actively looking for work. He should be aware that he is likely to be able to claim
A. child tax credit.
B. working tax credit.
C. jobseeker’s allowance.
D. statutory sick pay.
