STUDY ROOM
The CII Financial Assess training package tests your knowledge of key financial topics
QUESTION 1
QUESTION 5
QUESTION 8
A client agreement is required for which type of client? A Professional clients only B Retail and professional clients and eligible counterparties C Retail and professional clients D Retail clients only
What distinguishes NEST from every other pension scheme? A It cannot accept transfers from other pension schemes B It is an occupational scheme but uses the relief at source method of tax relief C It is run by the government D It must accept every employer who wants to use it, regardless of size
Who is responsible for the underlying investment decisions with collective investments? A The adviser B The client C The fund manager D The trustee
QUESTION 2 Geoff is terminally ill and plans to sell his whole of life policy to an intermediary to raise money. What is this called? A Equitable assignment B Power of attorney C Terminal illness benefit D Viatical settlement
QUESTION 3 Which Act introduced a replacement for the enduring power of attorney? A The Attorney Act 2006 B The Finance Act 2006 C The Mental Capacity Act 2005 D The Powers of Attorney Act 2005
QUESTION 4 How often can an individual access the pensions advice allowance? A Four times B Once C Three times D Twice
QUESTION 6 Under UK Financial Conduct Authority complaints rules, for how long must an authorised firm keep records of customer complaints for non-MiFID business? A At least three years B Indefinitely C One year D Six months
QUESTION 9 Which of the following is a requirement for a client to be treated as a professional client? A It is essential that no advice is given B The client must confirm their agreement in writing C The client refuses to disclose information to you D The professional client basis will apply to all new investment business
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QUESTION 10 QUESTION 7 How can a put option on a FTSE index help a fund manager who believes the index is going to fall? A They can buy the underlying asset at a price agreed at contract B They can buy the underlying asset at the price at expiry C They can sell the underlying asset at the exercise price D They can sell the underlying asset at the price at expiry of the contract
Systematic or market risk is measured by? A Alpha B Beta C Correlation D Standard deviation
YOUR SCORE » 1–3 POOR 4–6 GOOD
7–8 VERY GOOD 9-10 EXCELLENT
ANSWERS 1C. Following the implementation of MiFID II, client agreements are required for both retail and professional clients. 2D. Viatical settlements can be used to achieve much but not
all of the policy’s full sum insured. 3C. The Mental Capacity Act 2005 contains the provisions that introduced lasting powers of attorney. 4C The allowance can be used
a total of three times at any age (but only once in any tax year). 5D. This is NEST’s public service obligation. 6A. A record must be kept for at least three years. (In the case of MiFID, a firm’s records
must be kept for at least five years.) 7A. A put option gives the fund manager the right to sell at a specified price. If the index falls, they will make a profit. 8C. Professional fund managers
make the underlying investment decisions. 9B. A professional client must confirm their status in writing. 10B. Systematic or market risk is measured by beta.
spring 2020 | Personal Finance Professional | thepfs.org
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