CISI INVESTMENT RISK TAXATION LATEST
EVALUATION EXAM QUESTIONS AND ANSWERS
SURE A+
✔✔Capital redemption bond - ✔✔no insurance element, used purely for investment
✔✔SCARPs risk - ✔✔Structured capital at risk product - can lose all money if
index/stock falls below predetermined level
✔✔Warrants are issued on a _____ basis - ✔✔standalone
✔✔SEIS - ✔✔must be new trade
<200k gross assets
<25 employees
less than 2 years
✔✔Deterministic vs Stochastic - ✔✔Deterministic - straight line, no randomness
Stochastic - randomness scenarios
✔✔TER vs OCF - ✔✔TER did not include initial charges
OCF covers everything, more accurate
, ✔✔Cooling-off period applies to ____ products - ✔✔packaged
✔✔GIPS - ✔✔Global Investment Performance Standards
standardizes performance measurements
✔✔Small gifts exemption - ✔✔donor can gift 250 to any one person in any one tax year
If A GIFT totals more than 250, whole of it is chargeable
✔✔Is a QUALIFYING corporate bond subject to CGT? - ✔✔No
✔✔IHT Liability percentage - ✔✔40%
✔✔T-bills are available to new investment for sums in excess of: - ✔✔£500,000
✔✔Liquidity Ratio - ✔✔Current Assets - stock / current liabilities
✔✔Unit trust 'bid basis' - ✔✔unit is offered close to selling price
✔✔Who pays Class 1 NI contributions? - ✔✔Both employee and employer
✔✔Dividend cover - ✔✔EPS / DPS
✔✔"Residence" - ✔✔status in a given tax year
✔✔Event Risk is from: - ✔✔natural disaster
✔✔Rights issues are usually priced _____ current market price - ✔✔below
✔✔VCTs - ✔✔investment max 200k
30% tax relief
✔✔Standard with profits funds Bonus Types - ✔✔Interim, Reversionary, Final
✔✔Interest Yield - ✔✔Coupon / Clean Price x 100
✔✔BoE tool for interest rates - ✔✔gilt repo market
✔✔How are reporting funds taxed vs non reporting funds - ✔✔Reporting:
Dividends and interest are taxed as income, but they get the added benefit of capital
gains being taxed as capital gains. Non reporting on the other hand, everything is taxed
as income
EVALUATION EXAM QUESTIONS AND ANSWERS
SURE A+
✔✔Capital redemption bond - ✔✔no insurance element, used purely for investment
✔✔SCARPs risk - ✔✔Structured capital at risk product - can lose all money if
index/stock falls below predetermined level
✔✔Warrants are issued on a _____ basis - ✔✔standalone
✔✔SEIS - ✔✔must be new trade
<200k gross assets
<25 employees
less than 2 years
✔✔Deterministic vs Stochastic - ✔✔Deterministic - straight line, no randomness
Stochastic - randomness scenarios
✔✔TER vs OCF - ✔✔TER did not include initial charges
OCF covers everything, more accurate
, ✔✔Cooling-off period applies to ____ products - ✔✔packaged
✔✔GIPS - ✔✔Global Investment Performance Standards
standardizes performance measurements
✔✔Small gifts exemption - ✔✔donor can gift 250 to any one person in any one tax year
If A GIFT totals more than 250, whole of it is chargeable
✔✔Is a QUALIFYING corporate bond subject to CGT? - ✔✔No
✔✔IHT Liability percentage - ✔✔40%
✔✔T-bills are available to new investment for sums in excess of: - ✔✔£500,000
✔✔Liquidity Ratio - ✔✔Current Assets - stock / current liabilities
✔✔Unit trust 'bid basis' - ✔✔unit is offered close to selling price
✔✔Who pays Class 1 NI contributions? - ✔✔Both employee and employer
✔✔Dividend cover - ✔✔EPS / DPS
✔✔"Residence" - ✔✔status in a given tax year
✔✔Event Risk is from: - ✔✔natural disaster
✔✔Rights issues are usually priced _____ current market price - ✔✔below
✔✔VCTs - ✔✔investment max 200k
30% tax relief
✔✔Standard with profits funds Bonus Types - ✔✔Interim, Reversionary, Final
✔✔Interest Yield - ✔✔Coupon / Clean Price x 100
✔✔BoE tool for interest rates - ✔✔gilt repo market
✔✔How are reporting funds taxed vs non reporting funds - ✔✔Reporting:
Dividends and interest are taxed as income, but they get the added benefit of capital
gains being taxed as capital gains. Non reporting on the other hand, everything is taxed
as income
