Unit 2 previous mock questions Flashcards
Gary has found that the mortgage he is arranging post-October 2004, and which is secured by a first charge, is not regulated by the Financial Services Authority. This is because:
A: He is using the mortgage to build an extension on his existing residential property.
B: He is using the mortgage to buy a property to let out to tenants.
C: The mortgage will be partly used to repay credit card debts.
D: The mortgage will be used to repay a more expensive mortgage on his existing main residence.
B: He is using the mortgage to buy a property to let out to tenants.
A key function of the initial disclosure document is to explain:
A: The advisers status under the Financial services Act.
B: The area from where a potential client can obtain advice.
C: The Financial Services Act
D: The individual contracts that the adviser is licenced to sell
A: The advisers status under the Financial services Act.
Janice has cancelled an investment plan with the cancellation period but unfortunately has received back less than she invested. Why is this?
A: A surrender charge has been applied to her plan
B: A withdrawal charge has been applied to her plan.
C: She invested a lump sum into a unit-linked plan.
D: She invested a regular premium into a unit-linked plan.
C: She invested a lump sum into a unit-linked plan.
The Financial Services Authority has identified four types of risks faced by financial services consumers. From which one does the FSA not protect customers?
A: Bad faith risk
B: Performance risk
C: Prudential risk
D: Unsuitability risk
B: Performance risk
The main reason for the introduction of CAT standards by the Government was to encourage:
A: Better advice and lower commissions
B: Better returns and more security
C: Simpler products and lower charges
D: Stock market growth and lower risks.
C: Simpler products and lower charges
Which type of business was not included in the Second Life Directive issues by the EU in 1990?
A: Annuities
B: Group pension funds
C: Permanent health insurance
D: Whole-of-life assurance
B: Group pension funds
Which document is given to a regular customer in order to disclose how unsolicited calls can be made?
A: Business card
B: Client agreement
C: Key features document
D: Terms of business letter
B: Client agreement
Which one of the following best describes the reason why the Financial
Services and Markets Act 2000 was introduced?
A: It was necessary to make the Home Office the main authorising body.
B: It was necessary to make the Treasury the main authorising body.
C: The existing regulatory structure was too bureaucratic
D: The existing regulatory structure was too fragmented
D: The existing regulatory structure was too fragmented
Jason has just received a first interim letter from a firm to whom he had previously made a complaint. The firm has sent this letter because:
A: Jason has not yet confirmed his complaint to the firm in writing
B: The complaint is still under investigation after four weeks
C: The firm has completed its investigations into the complaint
D: They have referred his case to the Financial Ombudsman Service.
B: The complaint is still under investigation after four weeks
Grey, a mortgage adviser, is assessing the suitability of a mortgage from a client, post-October 2004. This means that he is taking all of the following actions except:
A: Assessing what type of mortgage product is suitable for the client.
B: Assessing whether a mortgage is, in itself, a suitable product for the client
C: Selecting the best mortgage and provider to meet client needs.
D: Selecting the most appropriate property type for the client.
D: Selecting the most appropriate property type for the client.
The EU definition of market abuse can be divided into two areas known as:
A: Best execution and money laundering
B: Insider dealing and market manipulation
C: Market manipulation and money laundering
D: Money laundering and insider dealing
B: Insider dealing and market manipulation
An authorised firms senior management must ensure that their organisation is protected from use by money launderers by doing all of the following except:
A: Alerting those under suspicion of money laundering
B: Appointing a Money Laundering Reporting Officer
C: Providing regular training for staff
D: Reporting suspicious transactions
A: Alerting those under suspicion of money laundering
Which one of the following is exempt from the Consumer Credit Act 1974?
A: A credit card account with a limit of £5000
B: A further advance for house repairs of £15,000
C: A loan for £20,000 secured on property for car purchase.
D: An unsecured personal loan of £10,000
B: A further advance for house repairs of £15,000
A prudential risk is described as:
A: The risk of a customer not understanding a product
B: The risk of a firm collapsing because of incompetent management
C: The risk of loss due to mis-selling or misrepresentation
D: The risk that investments fail to deliver expected returns
B: The risk of a firm collapsing because of incompetent management
Before an employee carries out duties that fall under the FSA’s regulatory responsibility he should:
A: Be assessed as competent to undertake the role without supervision
B: Be assessed on technical knowledge and its application
C: Have completed the required number of hours of continuing professional development
D: Have successfully completed him probation period.
A: Be assessed as competent to undertake the role without supervision
