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.
We hope you find our Q&A useful in achieving your qualifications.Questions
1. Insurance protects and safeguards assets from the financial effects of damage or loss. Which of the following can be insured?
A. Physical assets, goodwill, and earnings potential.
B. Physical assets, financial transactions, and profit potential.
C. Financial transactions, earnings potential, and goodwill.
D. Financial transactions, profit potential and goodwill.
2. Alison invested £10,000 for three years at 6%. At the end of this period, the accumulated capital and interest was invested for a further three years at 5%. What will be the total sum she receives at the end of the six-year period?
A. £23,486.00
B. £13,787.50
C. £11,434.16
D. £13,300.00
3. Martin and Suzanne are the trustees of a discretionary trust where the investment portfolio is made up mainly of equities. They are concerned with the Capital Gains Tax (CGT) implications of any future disposals they make. Which of the following statements are correct? (Tick all that apply.)
A. Trust gains are always taxed at the threshold rates of 10% and 20%.
B. Gains are calculated on the difference between the acquisition cost and the market value.
C. Trustees are prohibited from electing holdover relief on disposals.
D. If the settlor subsequently acquires an interest, any holdover relief claimed when the trust was set up will be clawed back.
4. Adam is 63 and is considering using his personal pension fund to purchase a lifetime annuity. According to HM Revenue & Customs (HMRC) requirements, what is the statutory escalation that must be included?
A. There is no statutory escalation requirement.
B. By RPI.
C. By RPI or 2.5%.
D. By CPI or 5%.
5. An accident, sickness and unemployment insurance policy may also pay a
A. lump sum benefit for total and permanent disability.
B. daily amount for each day spent in hospital.
C. lump sum benefit for loss of a limb or sight.
D. weekly amount for each week requiring home nursing care.
6. Which two types of company security tend to do better than the market as a whole according to a study carried out by Fama and French?
A. Large cap and value stocks.
B. Large cap and growth stocks.
C. Small cap and value stocks.
D. Small cap and growth stocks.
7. The most common form of issuing new shares under an initial public offering or IPO is by
A. an offer for sale.
B. an offer for subscription.
C. a placing.
D. an introduction.
8. Which of the following features is usually covered in a health cash plan?
A. Respite care.
B. Hospital stays due to an existing condition.
C. Cost of treatment or reports.
D. Professional care benefit.
9. What is the essential difference between a Lifetime Mortgage and a Home Reversion Plan? A Lifetime Mortgage
A. lasts for the mortgagee’s lifetime, but a Home Reversion Plan is for a set time period.
B. can typically only be taken out by over 55s, whereas a Home Reversion Plan can be taken out at any age.
C. is a loan secured against a property; a Home Reversion Plan is not a loan but involves the sale of the property.
D. tends to have a much lower interest rate than Home Reversion Plans.
10. Sam is currently saving for his first property. He took out a Help to Buy ISA in January 2019. Sam should be aware that
A. the bonus payment is £50 for every £200 saved.
B. the bonus payment is 30% of the amount saved.
C. the maximum bonus is £4,000.
D. he can continue contributions until 30 January 2029.
“Need help with your CII exams? For resources including mock exam papers and e-mocks, calculation workbooks, revision notes, audio masterclasses and video tutorials do visit Brand Financial Training at https://brandft.co.uk and don’t forget to download your free taster versions!”
