test

Question 1

When setting the Bank rate, the Monetary Policy Committee uses?

Answer 1

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.

Question 2

or a large company, the risk of a terrorist incident occurring is an example of:?

Answer 2

A. business continuity risk. Correct. This may make it difficult for the business to continue

Question 3

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:

Answer 3

maturity transformation. Correct. Eliminating timescale discrepancies is known as maturity transformation.

Question 4

Which type of investment normally pay interest?

Answer 4

Corporate bonds. Correct. Corporate bonds pay regular interest.

Question 5

firm can benefit from taking complaints seriously because:

Answer 5

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.

Question 6

Who has a similar role at a unit trust to the role of a depositary at an OEIC?

Answer 6

The correct answer is: Trustee.

Question 7

For what minimum period must an authorised firm keep a record of the advice given relating to a stakeholder pension?

Answer 7

5 years

Question 8

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:

Answer 8

The correct answer is: eight weeks.

Question 9

Which of the following arrangements will immediately and substantially reduce the amount of inheritance tax due on an estate?

Answer 9

The correct answer is: Discounted gift trust.

Question 10

The requirement for a firm to have adequate risk management systems forms part of which of the FCA’s Principles for Businesses?

Answer 10

The correct answer is: Management and control.

Question 11

Which of the following is not a form of risk sharing?

Answer 11

self insurance

Question 12

Under anti-money-laundering legislation, records of identification obtained from individuals must be held for a minimum of:

Answer 12

The correct answer is: five years from the end of a customer relationship.

Question 13

Which state benefits is not taxable?

Answer 13

The correct answer is: Attendance Allowance.

Question 14

The risk that a firm will not have the immediate resources to meet obligations as they fall due is known as:

Answer 14

The correct answer is: liquidity risk.

Question 15

When prices of goods in general have fallen over a sustained period, this is known as:

Answer 15

The correct answer is: deflation.

Question 16

For a life policy, when should a suitability report normally be given to a customer?

Answer 16

The correct answer is: Before the contract is concluded.

Question 17

Which types of pension scheme are regulated by the Pensions Regulator?

Answer 17

The correct answer is: Occupational schemes and group personal or stakeholder schemes only.

Question 18

What is the maximum inheritance tax exit charge on a ‘relevant property trust’?

Answer 18

6%

Question 19

Which of the following cannot be reduced by diversification?

Answer 19

The correct answer is: Systematic risk.

Question 20

Which of the following risks can an investor usually avoid by trading only in the shares of larger established companies?

Answer 20

The correct answer is: Liquidity risk.

Question 21

Excluding state benefits, the maximum benefit payable from an income protection insurance policy, as a percentage of pre-disability earnings is typically:

Answer 21

The correct answer is: 50 - 60%.

Question 22

Which type of Will cannot be revoked after the death of the first party?

Answer 22

The correct answer is: Mutual.

Question 23

What is the latest point in the sales process that a key features document for a personal pension should be given to a client?

Answer 23

The correct answer is: Before the application form is signed.

Question 24

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:

Answer 24

The correct answer is: honesty, integrity and reputation.

Question 25

Param and Priti have £250,000 in a bank account as a result of selling the family home last month. If the bank became insolvent today and they had to make a claim to the Financial Services Compensation Scheme, subject to appropriate proof they would receive total compensation of:

Answer 25

They would benefit from the FSCS temporary high balance rules and receive £250,000.

Question 26

Within what timescale must the FCA respond to a ‘super-complaint’ from a designated consumer body, setting out how it proposes to deal with the complaint?

Answer 26

90 days

Question 27

Which of the following statements is true with regard to execution-only business?

Answer 27

The adviser’s duty of care to explain fully the nature of the product or investment and the risks involved does not apply.

Question 28

Which type of EU legislation is not immediately binding but requires each member state to enact its provisions through national legislation?

Answer 28

The correct answer is: Directive.

Question 29

Investment bonds are?

Answer 29

Single premium life policies

Question 30

FOS complain to FCA

Answer 30

6 Months

Question 31

Counter party risk

Answer 31

Financial intermary as they are acting as the intermary

Question 32

Eligible jobholder are what age

Answer 32

22 and state pension age

Question 33

To get a state pension what must you have made

Answer 33

NI contributions

Question 34

Deferring state pension…. Expand

Answer 34

1% for every 9 weeks deferment