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1
Q

Which one of the following types of life policy is TYPICALLY used in connection with key person assurance?
A) endowment assurance
b)whole of life assurance
c) term assurance
D)personal pension term assurance

A

c)

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2
Q

which basis would be MOST suitable for husband and wife seeking to whole-life0life assurance to cover likely IHT
a)joint life on first death
b) single life of the youngest
c) single life of the oldest
d) joint life payable on the second death

A

d)

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3
Q

Which on of the following is the most appropriate type of life policy to support an ISA mortgage
a) endowment assurance
b) whole of life assurance
c) decreasing term assurance
D) level term assurance

A

d)

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4
Q

Martin has set up a trust find for the benefit of his 3 grandchildren and has appointed 2 trustee with discretion to exercise their powers. in these circumstance, which of the following is correct?
a) the trustees have no legal interest in the trust property
b) the trustee act 200 requries the grandchildren to obtain advise when reviewing investments
C) martin is known as the testator of the trust and the grandchildren as beneficiaries
d) both trustees must agree before exercising discretionary powers

A

d)

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5
Q

mike is retiring from his company after 25 years. He is planning to take a cash lump sum of £30K and £15k per annum from his personal pension plan. What will the tax liability be on these benefits?

a) he will not have a tax liability on either of the pensions benefits

b) the lump summ will be taxed free but he will pay income tax on the annual pension

c) the regular pension will be tax free but mike will pay basis rate income tax on the lump sum

d) he will pay CGT on the lump sum above the annual allowanc e

A

b)

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6
Q

when used to repay a mortgage for a client with low - medium risk profile, which types of endowment policy is MOST likely to produce a surplus on the maturity date?

a) non-profit
b) low-start
C) full with profit
D0 unit-linked

A

C

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7
Q

Accident- sickness and unemployment policies provide benefits on which one of the following bases?

a) reg income payable for a deferred max period

b) lump sum payable after a short deferred period

c) regualar income payable for an unlimited period

d) lump sum payable at the end of the term

A

a)

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8
Q

The amount of deferred interest under a deferred interest mortgage is

a) added to the loan oustanding

b) written off by the lender provided the mortgage runs full term

c) repaid in full at the end of the deferred period

d) collected by means of repayments calculated at a rate higher than market rate after the deferred period

A

a)

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9
Q

who is consider to be the legal owner of a life policy placed under trust?

a) settlor
b) beneficiary
c) excutor
d) trustees

A

D)

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10
Q

An investment trust
a) is another name of a unit trust
B) pays out gross income to investors
C) is subject a CGT
d) is a public limited company

A

D)

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11
Q

which is INCORRECT statement, free standing additional voluntary contributions plans FSAVC?

A)FSAVCs can be sued to supplements the income from an occupational pension scheme

B) FSAVs provide an income in retirement

C) employers must contribute to an employee FCAVS

d) FCAVCS are intitate by the employer

A

C) must contribute

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12
Q

The EU has issued a new directive. This means that a member state:

a) must implement the directive in its precise original wording

b) can choose whether or not to implement the directive

c) is only required to implement the directive in its entirety if its directed to them

d) has the choice of how to meet the directives objectivies

A

d)

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13
Q

What is the maximum amount that can be invested into premium bonds

a) £40k
B25K
c £15K
D) 50k

A

D) £50k

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14
Q

Sarah has been advised that during the current tax year 30% tax relief is available for her via self-assesment this confirms that she:

a) has an occupational pension plan

b) has invested in a venture capital trust

c) has overpaid in earlier years

d) was born before 6 th april

A

b) venture capital

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15
Q

Which of the following is always a mutual organization?

a) stock broker

b) bank

c) friendly society

d) insurance

A

C)

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16
Q

Terry has a coupon on his GILTs paid gross. As a basis rate tax payer he will pay?

a) 40% income tax on interest received

b) 20% income tax on interest received

c) marginal rate income tax at encashment

d) capital tax on maturity

A

b) 20%

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17
Q

financial intermediaries can provide maturity transformation because they

a) aggregate many small desposits from a large number of clients

b) provide services to clients from many different geographical locations

c) offer awide range of desposit accounts to a wide range of depositors

d) reduce the risk of default or fraud by lending to a wide variety of borrowers

A

c)

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18
Q

what is the Minimum age at which william can access the equities element of an ISA?

A)21
B)16
C) any age
D) 18

A

D) 18

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19
Q

Self employed people to set against income Tax
The expenses must be incurred?

a) wholley and necessarily for the business

b) wholley and exclusively for the business

c) wholley exclusively and necessarily for the buiness

d) exclusively and necessarily for the business

A

b) wholley and exclusively for the buiness

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20
Q

When acting as the agent of a principal, it is a fundamental rules that:]

a) an agent can conclude contracts on behalf of the principal

b) a principal must ratify the acts of the agent

c) an agent is always responsilbe for the acts for the prinicpal

d) a prinicpal is always responsible for the acts of the agents

A

a)

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21
Q

What are the tax benefits of a group personal accident and sickness scheme arranged by an employer?

a) the employer may claim tax relied against the premiums

b) the premiums will not be classed as a taxable benefit in kind for the employee

c) the employer may offset premiums against corportation tax

d) the employers NIC are reduced

A

c)

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22
Q

Which one of the following ways does a unit linked endowment differ from a tradional with profits endowmenets?

a) joint life plans are not available

b) there is no gauranteed sum assured at maturity

c) a death benefit applies throughtout the term

d) a higher capital gains tax liability applies

A

b)

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23
Q

The interest rate on a base rate tracker mortgage is usally

a) mactched to the base rate subject to annual reviews

b) fixed within a range of above and velow the base rate

c) higher than the base rate

D) lower than base rate

A

C) hgiher than the base rate

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24
Q

Which one of the following is true in relation to the manager of an investment trust?

a) he can cancel units if the fund value falls sharly

b) he cannt barrow the fund

c) he can issue more units or repurchase units according to demand

d) he can borrow the improve income and capital growth

A

D)

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25
Q

WHich one of the following is true of a second mortgage

a) it will usually be with a different lender

b) it must not be greater than the first mortgage

c) it must be less than £25k

d) it will be subject between lender and the new one

A

A) diferrent lender

26
Q

Under the terms of a split capital investment trust, what minimum percentgage of the income generated by the portfolio is allocated to the income shares?

A0 80%

B) 45%

c) 100%

D) 90%

A

C)

27
Q

Uder a home income scheme or lifetime mortgage, how is the o/s loan normally repaid?

a) by income from a purchased life annity

B) from the proceeds of the sale of the house after borrower’s death

C) from the proceeds of whole - of - life policy

d) by the borrower relatives after his death

A

B)

28
Q

wants to start a whole-of-life -assurance, which will also provide crititcal ilness cover. which specific type of plan should he choose?

a) with-profit

b) flexible

c) unit-linked

d) universal

A

d)

29
Q

which on of the following features existing under some personal pensions plan is NOT permitted under a stakeholder pension?
a) contracting out

b) utitised with profits funds

C) tax free cash

d) exit charge

A

d)

30
Q

How would the payments from critical illness cover policy be best described?

A) an annuity

B) lump sum

C) replacement income

D) lifelong

A

b)

31
Q

An investment trust is best described as:
A a company that invests in the stocks and shares of other companies.
B a trust that invests solely in commercial property.
C a trust that is owned by its members.
D an open-ended investment company that invests in shares of other companies.

A

a)

32
Q

David has been particularly attracted to investment trusts because of their ability to benefit from
gearing. This indicates that David believes that the market will:
A favour income stocks.
B fall.
C remain stable.
D rise.

A

D

33
Q

On a with-profits policy, what is a reversionary bonus?
A payment made on maturity, reflecting the investment performance over the term of the policy.

B A payment that is declared regularly and, once allocated to the policy, cannot be removed.

C A payment that is pre-set at an anticipated bonus rate, but is reduced if investment

performance is less than anticipated.

D An irregular payment, made at the discretion of the insurance company from orphan funds.

A

B

34
Q

When assessing the suitability of a proposed recommendation, which of the following factors is not
relevant?
A Impact on entitlement to state benefits that the client may receive.
B The financial outlay required from the client.
C The remuneration to the adviser generated by the recommended product.
D The timescale over which the product will run.

A

C

35
Q

What is the main advantage of a capped interest rate option when taking out a mortgage?
A If interest rates go up, the mortgage interest rate will be limited to a pre-set ceiling.
B Interest rates are linked to the Bank of England’s base rate.
C The amount payable is fixed for the duration of the capped rate.
D There is a genuine discount off the normal variable mortgage interest rate.

A

A

36
Q

What is the correct name for a mortgage scheme that typically allows overpayments,
underpayments and payment holidays?
A Cap and collar.
B Fixed.
C Flexible.
D Variable.

A

C

37
Q

Of the information below, gathered in respect of Alice, which item represents a ‘hard’ fact?
A Her investment portfolio has performed below her expectations.
B Her savings account balance has fallen to £5,000.
C She hopes to retire by the age of 60.
D She wishes to be financially secure when she retires.

A

B

38
Q

Martin has set up a trust fund for the benefit of his three grandchildren and has appointed two
trustees with discretion to exercise their powers. In these circumstances, which of the following is
correct?

A Both trustees must agree, before exercising their discretionary powers.
B Martin is known as the testator of the trust and the grandchildren as the beneficiaries.
C The Trustee Act 2000 requires the grandchildren to obtain advice when reviewing
investments.

D The trustees have no legal interest in the trust property.

A

A

39
Q

Under the law of agency, a recent act by an agent has been subject to ratification. This implies that
the agent has:
A asked his principal to deal directly with a client.
B exceeded his authority.
C received money or money’s worth from a client.
D submitted a written contract.

A

B

40
Q

Which of the following persons would most likely be considered automatically resident in the UK for
tax purposes?
A Bella, a first-time visitor to the UK, who will spend 180 days in this tax year in the UK developing her Italian-based fashion company.

B Dmitri, a first-time visitor to the UK, who has a seven-month contract for business consultancy
in London, which commenced in January 2018.

C Luigi, a first-time visitor to the UK, who has a nine-month contract in Essex with a telecoms
company, which commenced in April 2018.

D Sandra, who normally lives in France, but spends two months a year helping on the family
farm in Scotland.

A

C

41
Q

For a UK resident, which of the following personally owned assets would be exempt from capital
gains tax?
A A piece of personal jewellery valued at £20,000.
B A Spanish property used for holiday visits.
C Euros held for use on foreign holidays.
D Shares purchased on the UK stock market.

A

C

42
Q

Gains from which of the following are not exempt from capital gains tax in the hands of the
investor?
A Authorised unit trust.
B Gilts.
C NS&I Savings Certificates.
D Stocks and shares ISA.

A

A

43
Q

In the calculation of capital gains tax liability, which of the following costs can be taken into account
to reduce the amount of taxable gain?
A Capital allowances only.
B Costs incurred in acquiring and disposing of an asset only.
C Costs incurred in acquiring, enhancing and disposing of an asset.
D Costs incurred in acquiring, maintaining and disposing of an asset.

A

C

44
Q

When shares are purchased using an electronic trading system, the:
A buyer pays the stamp duty reserve tax based on the market value.
B owner of the shares must be a stockbroker.
C share transfer can be registered before the documents are stamped.
D transaction has been completed orally so no stamp duty reserve tax is payable.

A

A

45
Q

A company will pay corporation tax on a quarterly basis where:
A it has more than 1,000 employees.
B profit is less than £1.5m per year.
C profit is more than £1.5m per year.
D turnover is less than £1.5m per year.

A

c

46
Q

Which type of fee is normally charged on a fixed-rate mortgage, but not on a standard-variable rate
mortgage?
A Arrangement fee.
B Broker fee.
C Higher lending charge.
D Valuation fee.

A

A

47
Q

An advantage of a variable rate mortgage is that:
A arrangement fees can always be added to the loan.
B borrowers are able to benefit from reductions in interest rates.
C first-time buyers are able to budget accurately in the early years.
D repayments to the lender are lower than any other product.

A

B

48
Q

The specialist sourcebooks section within the FCA Handbook includes arrangements for:
A individual responsibilities.
B international trading.
C product derivatives.
D professional firms.

A

D

49
Q

One of the six outcomes for retail consumers in relation to the fair treatment of customers requires
that firms ensure that there are no unreasonable barriers to:
A accessing products, receiving suitable advice, or complaining.
B accessing products, switching product or provider, or making a claim.
C switching product or provider, receiving suitable advice, or making a claim.
D switching product or provider, making a claim, or complaining.

A

D

50
Q

Miranda performs a senior management function in the firm she works for. Which of the following
principles does not specifically apply to her role?

A She must, at all times, act to avoid situations that could lead to risks to the business.
B She must disclose appropriately any information of which the FCA or PRA would reasonably expect notice.

C She must take reasonable steps to ensure that the business of the firm for which she is responsible complies with relevant regulatory requirements and standards.

D She must take reasonable steps to ensure that the business of the firm for which she is responsible is organised so that it can be controlled effectively.

A

A

51
Q

The FCA requires that a firm’s systems and controls must:
A be agreed by the FCA before implementation.
B be notified to customers.
C be regularly reviewed.
D meet an agreed industry standard.

A

C

52
Q

Under the definitions of market abuse, which of the following is specifically covered?
A Dishonesty.
B Insider dealing.
C Money laundering.
D Pricing.

A

B

53
Q

Which of the following is not one of the Financial Conduct Authority’s Principles for Businesses?
A To act with due skill, care and diligence.
B To act with integrity.
C To have a clear chain of responsibility.
D To observe proper standards of market conduct.

A

D

54
Q

If a customer cancels their level term assurance contract within the cooling-off period, the insurance
company must return any sums paid to it within how many days?
A 7.
B 14.
C 28.
D 30.

A

30

55
Q
A
56
Q

David has arranged a life policy for his customer, Jane. Assuming that Jane does not require
immediate cover and that details of suitability are not provided orally, what is the latest date that the
suitability report can be sent to Jane?
A Five days after the end of the cooling-off period.
B Five days after the final interview.
C Five days after the initial interview.
D Before conclusion of the contract.

A

D

57
Q

Robo-advisers provide financial advice which is primarily based on the use of:
A algorithms.
B case-studies.
C human intervention.
D web-analytics.

A

A

58
Q

Under the EU Fourth Money Laundering Directive, beneficial owners of legal entities are defined as
those who own or control what minimum percentage of the legal entity?
A 5%.
B 10%.
C 25%.
D 50%.

A

C

59
Q

Henry invested £10,000 in a unit-linked lump sum product and cancelled seven days later. He
subsequently received a refund of £9,500. What did the reduction in his original investment
represent?
A The adviser’s fee.
B The cancellation charge.
C The handling charge.
D The reduction in the value of investment.

A

D

60
Q

Fred has requested that his bank provide a copy of his personal data related to his current account.
Data protection legislation requires that:
A any corrections must be completed within 14 days.
B he first confirms his identity by taking his passport into his local branch.
C the bank limits any administrative charge to a maximum of £25.
D the bank provides the data within one month of his request.

A

D

61
Q
A

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