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 October 2022 issue, relate to examinable Tax year 21/22, 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 can be directly attributed to the impact of taxation?
A. The difference in growth rates between property and cash.
B. The individual consumer’s ability to make investments.
C. The cost of providing State benefits to those in financial difficulty.
D. The use of quantitative easing following the financial crisis.
2. The COVID-19 pandemic can be regarded as what type of risk?
A. Beta risk.
B. Non-systematic risk.
C. Systematic risk.
D. Specific risk.
3. Suzy has recently become employed following a period of self-employment and has discovered she has paid too much in National Insurance contributions through her employer’s payroll. What can she expect to happen to rectify this situation?
A. She will automatically be credited with the overpayment as a lump sum at the end of the tax year.
B. Her National Insurance code will be adjusted immediately to reflect the overpayment.
C. Her Pay As You Earn code will be adjusted immediately to reflect the overpayment.
D. The over payment will be used to cover any underpayment that occurred whilst she was self-employed before any repayment is made to her.
4. Madeline has made a successful claim for Bereavement Support Payment at the higher rate. This is because she:
A. has earnings under the primary contribution threshold.
B. is claiming child benefit for her two children.
C. has paid National Insurance contributions at the higher rate for 25 weeks.
D. is over State pension age and has been UK resident for at least 12 months.
5. Vivienne wants to apply for a mortgage payment protection insurance policy. A typical eligibility condition is that she must
A. be aged between 21 and 60
B. have been employed/self-employed continuously for the last 6 months
C. be currently working for at least 30 hours per week
D. not have any pre-existing medical conditions
6. Neil has the following investments
Share Beta
A 1.0
B 1.2
C 1.5
D 1.8
From this information, we can say that
A. investment D is more volatile than the others.
B. investment D will give the best returns.
C. investment B and C are also known as defensive securities.
D. investment A is also known as an aggressive security.
7. On liquidation of a company, which of the following is given the highest priority ranking if there are NOT enough funds to satisfy all demands?
A. Ordinary shareholders.
B. Redeemable preference shareholders.
C. Unsecured creditors.
D. Secured creditors.
8. Roberta has been assessed as needing residential care and has a portfolio of unit trusts valued at £250,000 – how could this be used to fund her care needs?
A. The capital could be used
B. The dividends could be used
C. The dividends could be used to fund a protection contract
D. Both the dividends and the capital could be used
9. What happens to the maximum loan to value (LTV) that a lender will consider offering under a lifetime mortgage as a borrower gets older? The LTV
A. increases.
B. reduces.
C. stays the same.
D. has no correlation to the client’s age.
10. Guy, whose day job is that of an accountant, is considering entering the buy-to-let market for the first time with a view to supplementing his income and maybe making a profit on the sale of the property in a few years’ time. Which of the following could hinder a successful application for a buy-to-let mortgage?
A. Guy is planning to let the property through a local registered letting agency.
B. Guy’s intention is to let the property under a shorthold tenancy agreement.
C. Guy has worked for the same company for 10 years and earns £78,000 per year.
D. The purchase price of the property is £240,000 and Guy has a deposit of £15,000.
