CISI Investment, Risk & Taxation 2024
Maximum drawdown - CORRECT ANSWER-difference between the peak high
and low values of portfolio since inception
Benchmarks should be: - CORRECT ANSWER-- Unambiguous
- Investable
- Measurable
- Appropriate
- Specified in advance
What are mixed motive investments? - CORRECT ANSWER-Investments that
further a charitable cause
and
provide financial return
Financial advice charge must be based on: - CORRECT ANSWER-level of
service provided
Medium-term - CORRECT ANSWER-5-10 years
Murabaha - CORRECT ANSWER-form of credit where customer can make a
purchase without having to take an interest-bearing loan
Limitation of the Reduction in Yield (RIY) measure - CORRECT
ANSWER-requires assumptions of growth of investments
EIS gain deferral timeframe - CORRECT ANSWER-1 year PRIOR to disposal, or
3 years following disposal
4 types of crowdfunding - CORRECT ANSWER-- Investment
- Loan
- Donation
- Reward
Fund manager may choose to deal on a forward basis when: - CORRECT
ANSWER-- believes value has moved more than 2% in either direction
,- investor requests a forward price
- choose to deal on forward basis on large deals
ETCs are generally registered where? - CORRECT ANSWER-offshore
(trades are exempt from stamp duty)
3 biases of performance reporting for ARFs - CORRECT ANSWER--
self-selection bias
- backfill bias
- survivorship
Authorised corporate director - CORRECT ANSWER-day-to-day operation and
management of UK-authorised OEICs
Can the expenses of an offshore fund be offset against its income? - CORRECT
ANSWER-No
SSAS loan provisions - CORRECT ANSWER-max loan of 50% of the value of
SSAS over max term of 5 years
VCTs provide: - CORRECT ANSWER-capital to start-up companies by offering
tax benefits and reduced risk, while still offering growth from companies
Physical ETFs can use ____ to increase their magins - CORRECT
ANSWER-stock-lending
Mezzanine capital - CORRECT ANSWER-subordinated debt or preferred equity
that represent a claim on a company's assets that is senior only to common
shares
Seed Enterprise Investment Scheme (SEIS) - CORRECT ANSWER-Aimed at
investors in small start-up companies.
Many conditions are the same as for EIS, but there are a few important
differences:
- new qualifying trade
- Gross assets <£200k
, - <25 employees
- been trading less than 2 yrs
- tax relief 50% of up to £100k (max £50k in one year)
Junior ISA contribution limit - CORRECT ANSWER-£9,000
Growth Capital - CORRECT ANSWER-for mature companies looking to
restructure or finance an acquisition WITHOUT changing a company's ownership
Tax benefits of VCTs - CORRECT ANSWER-Dividends are tax-free for eligible
investors
(cannot be claimed by trustees or companies)
ISA contribution limit - CORRECT ANSWER-£20,000
Contribution limits to pensions - CORRECT ANSWER-- £40,000 maximum
- reduce £1 for every £2 earned over £240k
- £4,000 at least allowed
- can carry forward from previous 3 yrs (up to £160k in one year)
Maximum guaranteed period under lifetime annuity - CORRECT ANSWER-10
years
Capital redemption bonds - CORRECT ANSWER-- NO insurance element
- purely for investment purposes
- only pay out on expiry or early encashment
What does an institutional investor receive in return for depositing a basket of
securities with an ETF? - CORRECT ANSWER-Depositary receipts in the form of
creation units
Intestacy - surviving spouse - CORRECT ANSWER-entitled to STATUTORY
LEGACY of:
- £270k
- personal chattels
- 1/2 of residue
Maximum drawdown - CORRECT ANSWER-difference between the peak high
and low values of portfolio since inception
Benchmarks should be: - CORRECT ANSWER-- Unambiguous
- Investable
- Measurable
- Appropriate
- Specified in advance
What are mixed motive investments? - CORRECT ANSWER-Investments that
further a charitable cause
and
provide financial return
Financial advice charge must be based on: - CORRECT ANSWER-level of
service provided
Medium-term - CORRECT ANSWER-5-10 years
Murabaha - CORRECT ANSWER-form of credit where customer can make a
purchase without having to take an interest-bearing loan
Limitation of the Reduction in Yield (RIY) measure - CORRECT
ANSWER-requires assumptions of growth of investments
EIS gain deferral timeframe - CORRECT ANSWER-1 year PRIOR to disposal, or
3 years following disposal
4 types of crowdfunding - CORRECT ANSWER-- Investment
- Loan
- Donation
- Reward
Fund manager may choose to deal on a forward basis when: - CORRECT
ANSWER-- believes value has moved more than 2% in either direction
,- investor requests a forward price
- choose to deal on forward basis on large deals
ETCs are generally registered where? - CORRECT ANSWER-offshore
(trades are exempt from stamp duty)
3 biases of performance reporting for ARFs - CORRECT ANSWER--
self-selection bias
- backfill bias
- survivorship
Authorised corporate director - CORRECT ANSWER-day-to-day operation and
management of UK-authorised OEICs
Can the expenses of an offshore fund be offset against its income? - CORRECT
ANSWER-No
SSAS loan provisions - CORRECT ANSWER-max loan of 50% of the value of
SSAS over max term of 5 years
VCTs provide: - CORRECT ANSWER-capital to start-up companies by offering
tax benefits and reduced risk, while still offering growth from companies
Physical ETFs can use ____ to increase their magins - CORRECT
ANSWER-stock-lending
Mezzanine capital - CORRECT ANSWER-subordinated debt or preferred equity
that represent a claim on a company's assets that is senior only to common
shares
Seed Enterprise Investment Scheme (SEIS) - CORRECT ANSWER-Aimed at
investors in small start-up companies.
Many conditions are the same as for EIS, but there are a few important
differences:
- new qualifying trade
- Gross assets <£200k
, - <25 employees
- been trading less than 2 yrs
- tax relief 50% of up to £100k (max £50k in one year)
Junior ISA contribution limit - CORRECT ANSWER-£9,000
Growth Capital - CORRECT ANSWER-for mature companies looking to
restructure or finance an acquisition WITHOUT changing a company's ownership
Tax benefits of VCTs - CORRECT ANSWER-Dividends are tax-free for eligible
investors
(cannot be claimed by trustees or companies)
ISA contribution limit - CORRECT ANSWER-£20,000
Contribution limits to pensions - CORRECT ANSWER-- £40,000 maximum
- reduce £1 for every £2 earned over £240k
- £4,000 at least allowed
- can carry forward from previous 3 yrs (up to £160k in one year)
Maximum guaranteed period under lifetime annuity - CORRECT ANSWER-10
years
Capital redemption bonds - CORRECT ANSWER-- NO insurance element
- purely for investment purposes
- only pay out on expiry or early encashment
What does an institutional investor receive in return for depositing a basket of
securities with an ETF? - CORRECT ANSWER-Depositary receipts in the form of
creation units
Intestacy - surviving spouse - CORRECT ANSWER-entitled to STATUTORY
LEGACY of:
- £270k
- personal chattels
- 1/2 of residue
