Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

CeMAP 1 > MOCK EXAM 4 > Flashcards

MOCK EXAM 4 Flashcards

1
Q

The FCA Handbook consists mainly of ‘rules’ and ‘guidance’. Members must:

A. take the ‘rules’ as advice

B. be bound by the rules and take the ‘guidance’ as advice

C. take the ‘rules’ and ‘guidance’ as advice

D. be bound by both the ‘rules and ‘guidance’

A

B. be bound by the rules and take the ‘guidance’ as advice

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Which one of the following is NOT one of the main areas in which the Financial Conduct Authority intends to reduce financial crime?

A. Money laundering
B. Share-price reductions
C. Insider dealing
D. Electronic fraud

A

B. Share-price reductions

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

In terms of ‘knowing your customer’, what is an eligible counterparty?

A. Where a firm acts on behalf of a private customer
B. A private customer
C. Where a customer is in the financial services business in a controlled function
D. A corporate customer

A

C. Where a customer is in the financial services business in a controlled function

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Which of the following bank employees would not normally require direct FCA approval?

A. A branch cashier
B. Money Laundering Reporting Officer
C. Compliance Oversight
D. Head of internal auditing

A

A. A branch cashier

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Sam has been encouraged to take ‘basic advice’ as she is not financially astute. However, a friend has suggested that she receives full advice because:

A. a more detailed needs assessment would take place

B. risk would then be considered

C. she has no financial dependents

D. she has recently started a new mortgage

A

A. a more detailed needs assessment would take place

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

In relation to how a firm deals with its regulator, which one of the following is NOT defined within the Principles of Business? A firm must:

A. deal with its regulators in an open way

B. disclose appropriate data to its regulator

C. deal with its regulators in a co-operative way

D. disclose data on a regular basis to its regulator

A

D. disclose data on a regular basis to its regulator

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

When MUST the initial disclosure document be provided by a mortgage adviser?

A. At the start of the first meeting with a prospective client

B. As soon as regulated business is transacted

C. Within 14 days of the first meeting

D. As soon as the client requests it

A

A. At the start of the first meeting with a prospective client

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Which document is sent to a client advising them of their right to change their mind?

A. Acceptance letter
B. Surrender Notice
C. Terms of Business Letter
D. Cancellation Notice

A

D. Cancellation Notice

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Which type of FCA regulation is Treating Customers Fairly (TCF) an example of?

A. High level
B. Redress sourcebook
C. Principles based
D. Regulatory processes

A

C. Principles based

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

The performance of the FCA in regulating the industry is judged against:

A. a need to ensure 100% protection

B. a steady measurable reduction in financial wrongdoing

C. a number of ‘operational objectives’

D. an annually benchmarked achievement of all its statutory objectives

A

C. a number of ‘operational objectives’

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Which one of the following areas is NOT specifically covered by the ‘Training and Competence’ requirements?

A. Practical Assessment
B. Initial training
C. Business production levels
D. Ongoing supervision of ‘competent’ advisors

A

C. Business production levels

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

What is the latest date, if any, that the suitability letter can be sent to a customer looking to take out a life assurance policy?

A. Five days after the initial interview
B. Five days after the final interview
C. Five days after the end of the cooling-off period
D. Before the start of the contract.

A

D. Before the start of the contract.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Which one of the following is an example of a type of real time financial promotion?

A. telephone conversation
B. A radio appearance
C. An email D
D. website

A

A. telephone conversation

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Which one of the following accurately relates to the advice that MUST be given by independent intermediaries?

A. The cheapest product from the host employer

B. The cheapest product from any provider

C. A suitable product from an appropriate provider

D. A suitable product from the host employer

A

C. A suitable product from an appropriate provider

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Which of the following is not covered by the FCA’s Principles for Business?

A. A firm’s relations with its regulator
B. Guidelines on financial promotions
C. Maintenance of adequate financial resources
D. Protection of customers’ assets

A

B. Guidelines on financial promotions

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

When setting up a policy to provide legal expenses cover, the adviser is operating to rules issued by the:

A. Office of Fair Trading
B. Financial Conduct Authority
C. General Insurance Standards Council
D. ABI

A

B. Financial Conduct Authority

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

Which one of the following is FALSE of complaints referred to an Ombudsman?

A. The company involved should investigate the complaint before the Ombudsman

B. The company will often take the matter to court following the Ombudsman’s ruling

C. The Ombudsman’s decision is binding on the company

D. The Ombudsman may give awards of up to £160,000 plus costs

A

B. The company will often take the matter to court following the Ombudsman’s ruling

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

Paul was prosecuted under the Proceeds of Crime Act 2002 and received the maximum sentence of fourteen years and a fine. Which of the following is the most unlikely of him being guilty of?

A. Concealing
B. Tipping off
C. Arranging
D. Acquiring

A

B. Tipping off

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

The Financial Conduct Authority has a range of enforcement powers. Which of these is not a commonly recognised enforcement power?

A. Injunctions
B. Restitution
C. Withdrawal of approval
D. Imprisonment

A

D. Imprisonment

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

For how many years after an employee has left a firm, must training and competence records for a pensions transfer specialist be kept?

A. 3 years
B. 4 years
C. Indefinitely
D. 6 years

A

C. Indefinitely

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

During 2019, an individual sustained a loss of £105,000 following the insolvency of an authorised investment firm. What is his MAXIMUM claim under the Financial Services Compensation Scheme?

A. £40,000
B. £39,000
C. £48,000
D. £85,000

A

D. £85,000

22
Q

Which one of the following facts MUST be included on all regulated quotations as a result of the Consumer Credit Acts 1974 and 2006?

A. The annual percentage rate
B. The lender’s registered office
C. The purpose of the loan
D. The Bank of England base rate

A

A. The annual percentage rate

23
Q

To which of the following will the provisions of MiFID always apply?

A. A firm that underwrites the issue of any of the specified instruments

B. A firm that provides life assurance advice

C. A firm that provides mortgage advice

D. A firm that provides general insurance advice

A

A. A firm that underwrites the issue of any of the specified instruments

24
Q

Since April 2014, consumer credit regulation has now been taken over by which of these regulatory bodies?

A. Competition and Markets Authority
B. The FCA
C. The Bank of England
D. Office of Fair Trading

A

B. The FCA

25
Q

The Pensions Regulator was empowered by the:

A. FS&M Act 2000
B. Pensions Act 2004
C. FS Act 1986
D. The Financial Services Authority

A

B. Pensions Act 2004

26
Q

Maintaining competition in the UK financial system is an operational objective of the:

A. Financial Ombudsman Service
B. Financial Conduct Authority
C. Mortgage Code Compliance Board
D. The Bank of England

A

B. Financial Conduct Authority

27
Q

Which of the following figures is used to calculate the amount of capital that firms have to set aside to cover the possibility of business failure due to operational risk?

A. 0.1
B. 0.25
C. 0.20
D. 0.15

A

D. 0.15

28
Q

Jenny has just joined an investment firm and has been assessed as competent by her new employer. Her new employer will also be required to:

A. insist that new exams are taken
B. check that competence is maintained
C. no further action is needed by the company
D. she will need to do 10 hours a year CPD

A

B. check that competence is maintained

29
Q

A number of particular advantages were identified in the Stakeholder suite of products. Which of the following was not specifically identified?

A. Easier access for customers
B. Larger average investments
C. Reduced costs
D. Reduced risk

A

B. Larger average investments

30
Q

Under the rules relating to approved persons, in which function would the Money Laundering Reporting Officer be categorised?

A. Senior Management function
B. Customer function
C. Governing function
D. Required function

A

A. Senior Management function

31
Q

Which compliance health warning must appear on all advertising material containing details of past investment performance? Past performance:

A. is not necessarily better than future performance

B. is only a general guide to the future

C. of 5 years or more is a reasonable guide

D. is not necessarily a guide to future performance

A

D. is not necessarily a guide to future performance

32
Q

Which one of the following is NOT an operational objective of The Financial Conduct Authority?

A. Protecting competition for consumers

B. Controlling interest rates

C. Securing protection for consumers

D. Enhancing and protecting the integrity of the industry

A

B. Controlling interest rates

33
Q

Treating Customers Fairly (TCF) is designed to produce improved service outcomes for:

A. advisers
B. ombudsmen
C. consumers
D. providers

A

C. consumers

34
Q

How does the use of specialists within a firm impact on their status as independent advisers?

A. Within a firm, a specialist may claim to offer independent advice provided that he or she can meet the independence rule in every personal recommendation that he or she provides.

B. A firm providing independent advice should have a specialist in every area or no specialists at all.

C. A specialist in one advice area can only advise on other advice areas on a restricted basis.

D. If an individual decides to specialise in one area they can no longer call themselves independent.

A

A. Within a firm, a specialist may claim to offer independent advice provided that he or she can meet the independence rule in every personal recommendation that he or she provides.

35
Q

The FCA require certain rules to be adhered to in relation to financial promotions. Which statement is specifically true in relation to these rules?

A. A record must be retained by the compliance department until the next FCA inspection.

B. A record of the promotions must be supplied to the FCA archive along with proof of the factual claims made.

C. The records must be maintained in a secure location for a minimum period of at least 12 months since the last date of the promotion.

D. For retail customers, the financial promotion must be clear, fair and not misleading.

A

D. For retail customers, the financial promotion must be clear, fair and not misleading.

36
Q

Under the rules for investment advisers, advisers must disclose that they are either:

A. whole of market or tied.
B. independent or restricted.
C. independent or tied.
D. whole or market or independent.

A

B. independent or restricted.

37
Q

In relation to ‘suitable advice’, which one of the following is a minimum requirement of a restricted adviser?

A. Recommending the best product in the market place

B. Recommending the product closest to the client’s needs

C. Ensuring that no other product in the market provides a better fit

D. Ensuring that the product recommended fits the client’s needs

A

D. Ensuring that the product recommended fits the client’s needs

38
Q

A mortgage adviser must disclose within the initial disclosure document, which of the following?

A. Mortgage products from the whole of the market

B. The authorisation status of the firm and adviser

C. Details of the important elements of the mortgage

D. Any commission that they are receiving from the lender

A

B. The authorisation status of the firm and adviser

39
Q

When is it necessary to give a customer a client agreement?

A. If the transaction results from an off-the-page advertisement

B. When the customer has been given a business card

C. If the transaction is likely to involve designated investments

D. If the transaction involves any investment advice

A

C. If the transaction is likely to involve designated investments

40
Q

According to the Conduct of Business rules laid down by the Financial Conduct Authority, it is necessary to keep adequate records of all dealings with customers. Which one of the following is NOT a reason for this requirement?

A. To assist in responding to customer complaints
B. To provide evidence of compliance procedures
C. To constitute an audit trail for inspections
D. To verify commission income

A

D. To verify commission income

41
Q

Which of the following may be an eligible counterparty?

A. A firm acting on behalf of a retail client
B. Another authorised firm
C. A small business
D. A private individual

A

B. Another authorised firm

42
Q

What is the effect of the final response letter for a customer who is in the process of making a complaint about a financial services product he has bought?

A. They will now have to take legal action to obtain redress

B. The can now take the complaint to the Financial Ombudsman Service

C. The Financial Ombudsman Service has found their complaint frivolous

D. The customer will have to pay to progress the complaint further

A

B. The can now take the complaint to the Financial Ombudsman Service

43
Q

Giles has advised Malcolm regarding setting up his free standing AVC plan. For how long minimum must Giles keep Malcolm’s fact find details?

A. 3 months
B. indefinitely
C. 3 years
D. 10 years

A

B. indefinitely

44
Q

The Pensions Ombudsman handles complaints about:

A. the state pension scheme
B. the mis-selling of pension schemes
C. the administration of occupational pension schemes
D. the Occupational Pensions Board

A

C. the administration of occupational pension schemes

45
Q

Which one of the following is exempt from the Consumer Credit Acts?

A. A credit card account with a limit of £5,000
B. An unsecured personal loan of £10,000
C. A further advance of £15,000 for house repairs
D. A loan of £20,000 for car purchase

A

C. A further advance of £15,000 for house repairs

46
Q

The Financial Services Compensation Scheme will pay out compensation to customers who have:

A. been mis-sold a mortgage endowment policy

B. lost money through the insolvency of an authorised firm

C. been mis-sold a personal pension plan

D. lost money through the mismanagement of an investment fund

A

B. lost money through the insolvency of an authorised firm

47
Q

When carrying out an ‘execution-only’ sale, responsibility for the transaction rests with the:

A. adviser
B. regulator
C. product provider
D. customer

A

D. customer

48
Q

Joe runs his own multi tied adviser firm and wishes to create his own fact find form. Under what circumstances is this permitted?

A. Joe is free to prepare his own document
B. It is not permitted
C. Joe must seek approval from his main product providers
D. Joe must seek FSA approval of the text

A

A. Joe is free to prepare his own document

49
Q

Which source book provides details of complaints procedures and external dispute resolution?

A. Specialist
B. Business Standards
C. Market Conduct
D. Redress

A

D. Redress

50
Q

A client has an unresolved complaint about the endowment policy linked to his mortgage. He should take his complaint to the:

A. Investment Ombudsman
B. Insurance Ombudsman
C. PIA Ombudsman Service
D. Financial Ombudsman Service

A

D. Financial Ombudsman Service

CeMAP 1 (25 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions