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 22/23, 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. Which of the following would you expect to find in the financial section of a factfind:
i) Monthly income and expenditure; ii) Regular savings; iii) Employment details; iv) Family details?
A. i only.
B. i and iii only.
C. i and ii only.
D. iii and iv only.
2. A Bond is trading below its par value, what might cause this?
A. Interest rates have reduced sharply.
B. The coupon is below current interest rates.
C. The coupon is above current interest rates.
D. The issuer has a strong credit rating.
3. When would a Capital Gains Tax (CGT) chargeable disposal be deemed to have taken place in the following scenarios?
A. Sian, a beneficiary under a trust, becomes absolutely entitled to the trust assets.
B. James makes a gain of £120,000 on selling his main residence.
C. A married couple changes ownership of their investment bond when one becomes a basic rate taxpayer.
D. Peter dies and his antique car is passed to his son in accordance with his wishes.
4. Jita wants to take a tax free ‘pensions advice allowance’ from her SIPP. She should be aware that:
A. the financial advice must be regarding her SIPP only.
B. she can take £150 in a tax year subject to a maximum of three payments.
C. she can take £500 each tax year until her selected retirement age.
D. the payment must be paid directly to the financial adviser.
5. A mortgage is distinguished from an absolute assignment by a right known as the
A. law of reassignment
B. equity of redemption
C. repayment of security
D. power of retention
6. You are discussing the various risks that investors face with your new clients Toby and Emma. Emma asks you to explain to her what you mean by the term liquidity risk. You tell her it is the risk of
A. the issuer of a security being unable to repay capital or interest.
B. a new government changing fiscal policy.
C. investors forced to sell a security at a price below its fair value.
D. the value of sterling appreciating against a foreign currency.
7. A machine needed for goods production in a company is bought for £5,000. If it has a useful life of six years and an expected re-sale value at that point of £500 the annual depreciation charge is
A. £916
B. £833
C. £750
D. £417
8. Benefits from an immediate care annuity are typically paid after a cooling off period of
A. 7 days
B. 14 days
C. 28 days
D. 30 days
9. Leon took out a cash scheme in the early 1990s and on his subsequent death, the lender has requested an additional payment from his estate. This is likely to be because his
A. lender has imposed redemption charges.
B. interest rates have increased.
C. property has reduced in value.
D. property was in a poor state of repair.
10. Julie has a buy-to-let property. In the last year, she incurred costs for building insurance of £400, letting agency fees of £1,200, and £500 for accountancy fees. How much of these is she able to claim as allowable expenses?
A. All of them
B. Only the building insurance and accountancy fees
C. Only the letting agency fees
D. Only the accountancy fees
