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. The standard medium term time frame when discussing investment objectives is
A. up to five years.
B. from five to fifteen years.
C. from ten to fifteen years.
D. More than fifteen years.
2. Within a split capital investment trust, the “hurdle rate” is an indication of the
A. capital and income return on a particular share until wind-up.
B. annual growth rate investments must achieve to pay the current purchase price, the pre-determined redemption value, or the value at wind-up.
C. ratio by which the predetermined redemption value for a class of shares is currently covered by those assets of the company that are available for them.
D. annual percentage rate required to cover each share class at wind-up but based on growing only the equity portion of the portfolio.
3. On which of the following disposals would the sale proceeds be used as the disposal figure in calculating Capital Gains Tax (CGT)?
A. On a commercial sale.
B. If an asset is given away.
C. On a disposal to a connected person.
D. On a disposal, not at arm’s length.
4. In making your client aware of pension contribution insurance (PCI) on his newly established defined contribution pension scheme, you correctly advise him that (Tick all that apply.)
A. premiums will be eligible for tax relief.
B. in the event of illness, the PCI will make contributions to the client’s scheme.
C. both member and employer contributions can be covered.
D. payments will begin after an agreed deferred period.
5. Which of the following is not an aggregate driver in relation to the demand for mortality protection?
A. Movements in the housing market
B. Whether or not the client has any dependents
C. Income per head
D. The employment history of the applicant
6. Money market instruments allow issuers to raise funds for short-term periods at relatively low interest rates. Which of the following is a feature of a Treasury bill, a money market instrument issued by the government?
A. Issued at daily auctions.
B. Issued at a price below par.
C. Interest paid monthly.
D. High risk.
7. Where an order has been placed to sell an existing shareholding once the price reaches a specified figure, this is known as
A. stop loss.
B. fill or kill.
C. iceberg.
D. at best.
8. Which of the following statements regarding the requirements for a deed of variation to be effective for IHT planning is false?
A. It must refer to a will, intestacy or trust
B. The deed must be executed within two years of death
C. There must be no consideration for money or money’s worth
D. It must be signed by all the beneficiaries of the will
9. What is the statutory risk statement that needs to be included with illustrations for equity release mortgages?
A. Your home is at risk if you do not keep up payments on this mortgage. If you are in doubt, seek independent legal and financial advice.
B. Check that this mortgage will meet your needs if you want your family or others to inherit your home. Inflation can erode the value of the cash sum over time.
C. Check that this mortgage will meet your needs if you want your family or others to inherit your home. If you are in doubt, seek independent legal and financial advice.
D. Inflation can erode the value of the cash sum over time. Your home is at risk if you do not keep up repayments on this mortgage.
10. Julian is buying his dream cottage by the sea. He requested and has since received a RICS Condition Report which notes defects that need repairing but are NOT deemed serious or urgent. This is likely to be indicated by which colour of the traffic light system?
A. Red
B. Amber
C. Yellow
D. Green
