test Flashcards
When setting the Bank rate, the Monetary Policy Committee uses?
14-day gilt repos to meet its annual inflation target of 2% CPI. Correct. 14 day gilt repos are used to meet the CPI target.
or a large company, the risk of a terrorist incident occurring is an example of:?
A. business continuity risk. Correct. This may make it difficult for the business to continue
One of the main advantages of using a bank as an intermediary is that the discrepancy between timescales can be eliminated. This is referred to as:
maturity transformation. Correct. Eliminating timescale discrepancies is known as maturity transformation.
Which type of investment normally pay interest?
Corporate bonds. Correct. Corporate bonds pay regular interest.
firm can benefit from taking complaints seriously because:
complaints can provide feedback on how the company can improve its processes. Correct. Firms should look at the root cause of the complaints it receives and seek to improve processes where appropriate, to reduce the number of future complaints.
Who has a similar role at a unit trust to the role of a depositary at an OEIC?
The correct answer is: Trustee.
For what minimum period must an authorised firm keep a record of the advice given relating to a stakeholder pension?
5 years
A complaint made by an eligible complainant to an authorised firm can be referred to the Financial Ombudsman Service by the complainant, if it has not been satisfactorily resolved by the firm within:
The correct answer is: eight weeks.
Which of the following arrangements will immediately and substantially reduce the amount of inheritance tax due on an estate?
The correct answer is: Discounted gift trust.
The requirement for a firm to have adequate risk management systems forms part of which of the FCA’s Principles for Businesses?
The correct answer is: Management and control.
Which of the following is not a form of risk sharing?
self insurance
Under anti-money-laundering legislation, records of identification obtained from individuals must be held for a minimum of:
The correct answer is: five years from the end of a customer relationship.
Which state benefits is not taxable?
The correct answer is: Attendance Allowance.
The risk that a firm will not have the immediate resources to meet obligations as they fall due is known as:
The correct answer is: liquidity risk.
When prices of goods in general have fallen over a sustained period, this is known as:
The correct answer is: deflation.
For a life policy, when should a suitability report normally be given to a customer?
The correct answer is: Before the contract is concluded.
Which types of pension scheme are regulated by the Pensions Regulator?
The correct answer is: Occupational schemes and group personal or stakeholder schemes only.
What is the maximum inheritance tax exit charge on a ‘relevant property trust’?
6%
Which of the following cannot be reduced by diversification?
The correct answer is: Systematic risk.
Which of the following risks can an investor usually avoid by trading only in the shares of larger established companies?
The correct answer is: Liquidity risk.
Excluding state benefits, the maximum benefit payable from an income protection insurance policy, as a percentage of pre-disability earnings is typically:
The correct answer is: 50 - 60%.
Which type of Will cannot be revoked after the death of the first party?
The correct answer is: Mutual.
What is the latest point in the sales process that a key features document for a personal pension should be given to a client?
The correct answer is: Before the application form is signed.
avi is being assessed to see if he meets the ‘fit and proper’ test requirements. Part of the test involves assessing his complaints record. This would be primarily to assess his:
The correct answer is: honesty, integrity and reputation.
