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 November 2022 issue, relate to examinable Tax year 2022/23, 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. Jane is in receipt of State pension credit. If she receives support for mortgage interest loan payments, they will be paid
A. immediately, up to £100,00 of any mortgage covered with no limits on the length of claim
B. after 39 weeks and until her mortgage is paid off
C. after 26 weeks for interest on mortgages up to £100,000
D. after 39 weeks for a maximum of 2 years
2. A trader invests £5,000 in a contract for difference, trading at a 10% margin. She bought the shares when they were £6 and sold when they were £8. Ignoring charges, the profit on the transaction is
A. £1,667
B. £5,000
C. £10,000
D. £16,667
3. Timothy is considering investing a lump sum followed by regular contributions into either a unit trust or an investment trust. What is the key difference between these two types of collective investments?
A. Regular monthly investment can only be made via a unit trust.
B. There is greater fund choice via a unit trust.
C. An investment trust is closed ended while a unit trust is open ended.
D. Unit trusts are generally used for short to medium term investments, whereas investment trusts are used for long-term investments.
4. Jim has recently died with a large portfolio of stocks and shares ISAs. Income and gains will remain tax free up until the earlier of the estate being administered, the ISA being closed or
A. three years from the date of his death.
B. the first year anniversary of the date of his death.
C. two years and one day from the date of his death.
D. three years and one day from the date of his death.
5. Jason has a holding of corporate bonds and his friend Michael has a holding of gilts. Jason wants to know how his holding differs from Michael’s. You can tell him that:
A. only corporate bonds are exempt from CGT on any profit arising from a sale.
B. only the interest from corporate bonds is taxable as savings income.
C. only the interest from corporate bonds is always paid gross.
D. only corporate bonds can be traded on the stock market.
6. Clare has a stakeholder pension invested in the default investment fund with a lifestyle arrangement. Clare should be aware that: Tick all that apply.
A. switching begins between 15 and 20 years before Clare’s selected retirement age.
B. as she approaches her selected retirement date her fund is moved away from riskier investments such as equities into more secure investments such as gilts.
C. Clare will need to remember to switch her funds as her retirement date approaches.
D. switching occurs at pre-set times and does not allow for market conditions.
7. The following shares are held by Jill, Mark and Ned.
Name Share Beta
Jill A 0.6
Mark B 1.3
Ned C 0.8
If all three investors hold their shares for the same amount of time, which of the following applies?
A. If the stock market rises by 4%, Jill’s share is likely to fall (but less than 4%).
B. Ned is holding an ‘aggressive’ security.
C. Jill is holding the most volatile share out of the three.
D. If the stock market falls by 4%, Mark’s share is likely to fall more.
8. Which of the following is required for a will to be valid?
A. To be witnessed by one or more people
B. It must be in writing whether print, type or handwritten
C. For any previous wills to be physically destroyed
D. The testator’s full signature
9. Which of the following product features is applicable only to lifetime mortgages?
A. Method of repayment
B. Rent to be paid
C. Whether a part share of the property can be sold
D. Tenancy obligations
10. Which of the following is a factor to consider when holding commercial property?
A. There are always plenty of buyers and sellers.
B. Prices are more predictable than residential prices.
C. It can be held and managed directly or indirectly.
D. Short-term trading is helped by lower costs.
“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!”
