Professional Paraplanner’s TDQ (Training, Development and Qualifications) series, 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, which can also be found in our March 2022 issue, relate to examinable Tax year 20/21, examinable by the CII until 31 August 2022.
Questions
1. Which EU led requirements were incorporated into COBS?
A. Conduct of Business
B. MIFID
C. Principle based requirements
D. Banking conduct of business
2. Alison is considering giving her 17-year-old daughter Darcey £20,000 to invest in a cash ISA. Alison should be aware that: Tick all that apply.
A. any income of more than £100 per year will be taxed on her until Darcey is 18.
B. any income of any amount will be taxed on Darcey as she is over 16.
C. Darcey can transfer the cash ISA to a stocks and shares ISA at age 21.
D. withdrawals can be made at any time without any loss of tax relief.
3. Frankie is looking to mitigate her Inheritance Tax situation and has made a start by using her annual exemption for this tax year. She should be aware that: Tick all that apply.
A. she can use her annual exemption from last tax year if she hasn’t done so already.
B. any gift she makes now and, in the future, will qualify for taper relief.
C. if she makes a gift, it will be effective for IHT even if she retains a benefit from it.
D. a non-exempt gift into a discretionary trust will be a chargeable lifetime transfer (CLT).
4. Wendy is aged 56 and has substantial savings and pension income. She has her care costs met in full; this is likely to be because?
A. She lives in Northern Ireland
B. She has a dependent husband living in the marital home
C. She is incapacitated as a result of injuries caused by active military service
D. Her primary need has been identified as continuous healthcare
5. John will reach his State pension age in December 2021, but he is considering deferring this. He should be aware that in order to receive any increase in the pension he receives, he will need to defer for at least:
A. 9 weeks.
B. 6 weeks.
C. 5 weeks.
D. 4 weeks.
6. Which of the following is NOT an argument in favour of taking out private medical insurance?
A. It is more suitable for a patient with a chronic medical condition
B. Avoids long waiting lists for NHS treatment
C. Patient is normally able to choose their own hospital and surgeon
D. Likely to have a private room rather than be on a general ward
7. John purchased 6% Treasury Stock 2025 at a clean price of £118.55. If there are 5 years to redemption, what is the interest yield and the gross redemption yield of the stock?
A. Interest yield 5.06%, Gross redemption yield 6.00%
B. Interest yield 5.06%, Gross redemption yield 1.93%
C. Interest yield 6%, Gross redemption yield 3.71%
D. Interest yield 6%, Gross redemption yield 3.13%
8. If the price of a warrant is 49p, the underlying share price is 180p, and the exercise price is 190p, what is the warrant conversion premium?
A. 20.53%
B. 27.22%
C. 32.78%
D. 43.69%
9. Olivia has a mortgage secured against her property. It has been set up so she does NOT need to make any repayments and when the property is eventually sold, the loan will be repaid together with a payment based on the percentage increase in the property value. What type of plan does Olivia have?
A. Equity Share Mortgage
B. Home Reversion Plan
C. Shared Appreciation Mortgage
D. Home Income Plan
10. A bank buys a property for a customer and then sells it to them for a higher price. The higher amount is then repaid over the term. The house is registered to the buyer at outset. The arrangement being described is:
A. Ijara.
B. Let to buy.
C. Murabaha.
D. Sharia.
