1

Question 1

Personal savings allowance for interest on cash within their tax brackets

Answer 1

Basic - £1k
Higher - £500
Additional - £0

Question 2

FSCS limit with cash deposits

Answer 2

£85k

Question 3

Restricted access cash account

Answer 3

Have to give notice in order to access cash or cash tied in for period of time

Question 4

ISA annual limit and min. investment

Answer 4

£20k and £1

Question 5

What % must the ISA guarantee is returned in order to be classed as a cash ISA not a stocks and shares ISA

Answer 5

95%

Question 6

Limit allowed in premium bonds

Answer 6

£50k

Question 7

Fixed interest savings certificate

Answer 7

Lump sum investment with a guaranteed return over a term. Minimum of £100 and max. of £15k or issue.

Question 8

Index linked savings certificate

Answer 8

Lump sum investment with return linked to an index over a set term. Min of £100 and max. of £15k per issue.

Question 9

Child bond

Answer 9

Can only be bought by a relative and this is a rolling 5yr contract that terminates on first 5th anniversary after 16th birthday.

Min investment of £25 and max. Of £3k per issue.

Penalty of 90daysbinterdt for early encashment

Question 10

Direct saver NS&I consists of what 2 bonds and what is their min. and max. Investment?

Answer 10

Guaranteed growth bond and guranteed income bond. Min. investment £500 and max. £1mil per issue.

Question 11

Treasury bill

Answer 11

Sold below face value and bought back at face value. Aimed at the short term and weekly auctions are held. Guaranteed return applies.

Question 12

Who are treasury bills managed by?

Answer 12

Debt management office

Question 13

Certificates of deposit

Answer 13

Fixed term and fixed return over very short term. No guarantees apply and can be sold on stock market

Question 14

Commercial bills

Answer 14

Sold below face value and bought back at face value. Focused for very short term. Highest risk when compared to treasury bills and certificates of deposit.

Question 15

What time frame are treasury bills, certificates of deposit and commercial bills aimed at?

Answer 15

TB - 12 months
CD - 1-3 months
CB - 1-3 months

Question 16

Can treasury bills, certificates of deposit and commercial bills tradable on the stock market?

Answer 16

Yes

Question 17

What is the difference between money market funds and short term money market funds?

Answer 17

Money market funds - weighted average maturity of no more than 6 months and weighted average life of no more than 12 months

Short term money market funds - weighted average maturity of no more than 2months and weighted average life of no more than 4 months

Question 18

Weighted average maturity

Answer 18

Average time til maturity of security. Eg if has multiple with 2 and 4 month maturity date for different investments then average is 3 months

Question 19

Weighted average life

Answer 19

Average time til the original investment repaid in full. So average time of every penny lent to be repaid.

Question 20

Nominal value

Answer 20

Price at redemption (PAR value)

Question 21

Stocks coupon

Answer 21

Rate of interest paid

Question 22

Clean price of an asset

Answer 22

Price if no adjustments were made for any interest due from the bond

Question 23

How often does interest accrue and when is it paid

Answer 23

Accrues daily and paid 6 monthly

Question 24

Cum dividend and ex dividend for a bond

Answer 24

Cum - traded with dividend

Ex - traded without dividend

Question 25

GILTS are issued by

Answer 25

Debt management office of HM treasury

Question 26

What happens to bond prices and bond yields if interest rates rise?

Answer 26

Bond drives drop and bond yields increase

Question 27

What happens to bond prices and bond yields if interest rates fall?

Answer 27

Bond prices rise and bond yields fall

Question 28

Unsystematic risk

Answer 28

Risks that effect a particular stock

Question 29

Market or systematic risk

Answer 29

Risks that effect the whole market

Question 30

What level is a investment grade bond?

Answer 30

Anything higher than a BBB- or BBB3

Question 31

Short medium and long term GILTS as classified by DMO and financial press?

Answer 31

DMO FP S Less than 7yrs Less than 5yrs M 7-15yrs 5-15yrs L Over 15yrs Over 15yrs

Question 32

Index linked GILTs were created to tackle what?

Answer 32

Inflation

Question 33

Index linked GILT

Answer 33

Both interest payment and capital on maturity paid in line with inflation(RPI) from 3months prior

Question 34

Indexation lag

Answer 34

Delay of 3months for calculating RPI paid to bond on an index linked GILT

Question 35

Strips market for GILTS

Answer 35

Market to trade and sell interest payments and redemption payment separately

Question 36

Is a corporate bond secured or unsecured?

Answer 36

Can be both

Question 37

Debenture

Answer 37

Secured loan with trustees to represent the lender and a deed which sets the rules.

Question 38

Fixed charge debenture Floating charge debenture

Answer 38

Fixed - Charge over a specified asset so sale is restricted Floating - General charge over a companies assets so sale not restricted

Question 39

What has higher priority Floating charge debenture or fixed charge debenture?

Answer 39

Fixed

Question 40

Convertable loan stock

Answer 40

Able to convert loan into stock

Question 41

Floating rate notes and who are they issued by?

Answer 41

Often issued by banks Pay interest linked to money markets

Question 42

Permenant interest bearing shares (PIBS) and who are normally issued by?

Answer 42

Building society and returns are high but interest payments could be missed. Also not covered by FSCS

Question 43

Perpetual subordinate bonds

Answer 43

Any demutualised building societies PIBS turn into these

Question 44

Preference shares

Answer 44

Paid a fixed amount of dividends each year that isn’t related to performance of company but have no voting rights Convertable - change to ordinary shares at pre-set date and pre-set date if they wish Cumulative - any missed dividend must be made up in following payment Redeemable - can be purchased back by company

Question 45

Alphabet shares

Answer 45

Ordinary shares with different rules

Question 46

What ranks first out of preference and ordinary shares should the company go into liquidation?

Answer 46

Preference

Question 47

How often are preference shares paid and what if payments fall short of fixed agreement?

Answer 47

Every 6 months and they are made up in the following payment

Question 48

Private equity firms

Answer 48

Take out shares in a private company that isn’t listed in the stock exchange

Question 49

Dow Jones Standard and poor composite NASDAQ NIKKEI 225 TOPIX DAX 30 Hang seng CAC 40 FTSE/JSE S&P all ordinary shares

Answer 49

USA JAPAN GERMANY HONG KONG FRANCE SOUTH AFRICA AUSTRALIA

Question 50

Rent a room relief 6 sets of criteria

Answer 50

- must be in the UK - must be owners main residence - one exempt amount per residence - must not be self contained - must be furnished - owner must be resident

Question 51

Panel of takeover and mergers charge a flat fee of £X? And this applies to purchases above £X?

Answer 51

£1 above £10k

Question 52

SDLT FTB allowance?

Answer 52

£300k

Question 53

6 Tax free NS&I products

Answer 53

Junior ISA Premium bonds Fixed interest savings certificates Index linked savings certificates Children’s bonds Direct ISA

Question 54

What is the penalty levy for early withdrawal on a children’s bond?

Answer 54

90days of interest