TDQ: Test Your Knowledge – Questions

28 November 2019

For Professional Paraplanner’s TDQ (Training, Development and Qualifications) series, we have teamed up with key support providers, such as Brand Financial Training, to provide our readers with the very best in training, development and exam support.

This series aims to provide you with valuable advice and guidance materials to help you achieve your training goals, perfect your exam techniques and test your knowledge of the financial services market.

The following 10 questions, which can also be found in our December 2019 issue, relate to examinable Tax year 19/20, examinable by the CII until 31 August 2020.

1. Which of the following has a 30-day cancellation period? Tick all that apply.
A. Electing to take income withdrawal
B. Pension annuities
C. Stakeholder pensions
D. Opening a cash ISA

2. Stefan bought £1,000 nominal value of Treasury 7% 2026. What interest payment can he normally expect to receive?
A. £70 every year
B. £5.80 every month
C. £35 every 6 months
D. £23.33 quarterly

3. Which of the following is a feature of a Treasury bill?
A. Very illiquid
B. Issued by NS&I
C. Backed by the Government
D. Long-term maturities

4. Adam is 63 and is considering using his personal pension fund to purchase a lifetime annuity. According to 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. Which of the following conditions is usually excluded from critical illness cover?
A. Heart valve replacement
B. Major organ transplant
C. Temporary loss of speech
D. Terminal illness

6. As an advisory fund manager, you suggested to one of your clients that they encash a small part of their portfolio and buy futures. What does this suggest that you expect the price of the underlying asset to do?
A. Remain level
B. Fall
C. Price is not relevant
D. Rise

7. Ollie took out a shared appreciation mortgage of £25,000 with one third shared appreciation when his property was valued at £100,000? On his death some years later the property was valued at £160,000 – how much would be repayable to the lender?
A. £25,000
B. £33,333
C. £45,000
D. £53,333

8. Shaun has recently sold his buy to let house for £150,000 having paid £93,000 for it 15 years ago. He has incurred the following expenses; estate agent fees of £1,500; legal fees of £800 and £45 for a plumber to repair the shower prior to sale. What is his gain for capital gains tax purposes?
A. £56,200
B. £55,500
C. £54,700
D. £54,655

9. Maureen’s primary need is for continuous health care. Who is responsible for providing this?
A. The Local Authority for the area where Maureen resides
B. The National Health Service
C. Her GP’s Clinical Commissioning Group
D. Maureen herself

10. What tends to happen to the price of commercial property when interest rates increase?
A. They decrease
B. They stay the same
C. They increase
D. There is no correlation

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