CII RO1 - Chapter 2 Questions with
correct answers graded A+
From the fact find how will the Financial adviser discover the level of monthly needs? - correct
answer ✔✔- Income details
- main outgoings
What will the budgeting assessment allow you to examine? - correct answer ✔✔Whether a
proportion of income might be redirected away from the current area of expenditure to an are
of higher priority.
Expenditure can be considered under three headings, what are these? - correct answer ✔✔-
Essential Spending
- Everyday Spending
- Occasional or Non-essential Spending
What does APR stand for? - correct answer ✔✔Annual Percentage Rate
What is the best course of action when a client has surplus income but also had a few
unsecured debts? - correct answer ✔✔Debt Management Plan (DMP)
For advisers to recommend a Debt Management Plan, who do they have to be licensed by? -
correct answer ✔✔Consumer Credit Acts 1974/2006
What debt consolidation mean? - correct answer ✔✔It is where you negotiate a new loan to
repay an existing loan or loans, often with lower interest rates and lower monthly payments.
, List why advisers should exercise great caution when recommending debt consolidation? -
correct answer ✔✔- Companies that offer this quite often charge higher fees.
- Its a slippery road for the client as they simply might chose to build up further debt.
- if the loan is secured on their property they could loose their home.
What does IVA stand for ? - correct answer ✔✔Individual voluntary arrangement
What is the proper meaning of a mortgage? - correct answer ✔✔It is the security offered in
exchange for the loan.
When the security is signed over to the lender in exchange for the Mortgage, what is it called? -
correct answer ✔✔Assignment (Transfer of ownership)
What are the two main ways in which a Mortgage can be repaid? - correct answer ✔✔- Capital
and interest payments
- Interest only payments
Explain capital and interest payments on Mortgages? - correct answer ✔✔Monthly repayments
to the lender which includes a sum the cover a contribution towards the repayment of the
capital, plus a sum to cover interest.
Explain interest only payments of Mortgages? - correct answer ✔✔Only the interest accruing on
the loan is paid and the outstanding capital remains the same. At the end of the term the the
initial capital has to be repaid.
What does MMR stand for? - correct answer ✔✔Mortgage Market Review.
When did the MMR come into affect ? - correct answer ✔✔April 2014
correct answers graded A+
From the fact find how will the Financial adviser discover the level of monthly needs? - correct
answer ✔✔- Income details
- main outgoings
What will the budgeting assessment allow you to examine? - correct answer ✔✔Whether a
proportion of income might be redirected away from the current area of expenditure to an are
of higher priority.
Expenditure can be considered under three headings, what are these? - correct answer ✔✔-
Essential Spending
- Everyday Spending
- Occasional or Non-essential Spending
What does APR stand for? - correct answer ✔✔Annual Percentage Rate
What is the best course of action when a client has surplus income but also had a few
unsecured debts? - correct answer ✔✔Debt Management Plan (DMP)
For advisers to recommend a Debt Management Plan, who do they have to be licensed by? -
correct answer ✔✔Consumer Credit Acts 1974/2006
What debt consolidation mean? - correct answer ✔✔It is where you negotiate a new loan to
repay an existing loan or loans, often with lower interest rates and lower monthly payments.
, List why advisers should exercise great caution when recommending debt consolidation? -
correct answer ✔✔- Companies that offer this quite often charge higher fees.
- Its a slippery road for the client as they simply might chose to build up further debt.
- if the loan is secured on their property they could loose their home.
What does IVA stand for ? - correct answer ✔✔Individual voluntary arrangement
What is the proper meaning of a mortgage? - correct answer ✔✔It is the security offered in
exchange for the loan.
When the security is signed over to the lender in exchange for the Mortgage, what is it called? -
correct answer ✔✔Assignment (Transfer of ownership)
What are the two main ways in which a Mortgage can be repaid? - correct answer ✔✔- Capital
and interest payments
- Interest only payments
Explain capital and interest payments on Mortgages? - correct answer ✔✔Monthly repayments
to the lender which includes a sum the cover a contribution towards the repayment of the
capital, plus a sum to cover interest.
Explain interest only payments of Mortgages? - correct answer ✔✔Only the interest accruing on
the loan is paid and the outstanding capital remains the same. At the end of the term the the
initial capital has to be repaid.
What does MMR stand for? - correct answer ✔✔Mortgage Market Review.
When did the MMR come into affect ? - correct answer ✔✔April 2014
