CII R01 Mock Test 1 Exam Questions and
Answers Graded A+
What does the UK Government use to fund its borrowing? - Correct answer-Fixed
interest investments and National Savings and Investments
Gilts are loans to the UK Government. How do they pay out? - Correct answer-
They pay a fixed level of interest at regular intervals
Capital markets developed to meet what objective? - Correct answer-To invest in
assets which offer potential for real growth, and allow companies to raise money
without going to banks
Who oversees the UK payments system? - Correct answer-The Bank of England
Your client, Jeremy, has asked you to confirm what a discretionary portfolio
management service is. You tell him that it is a service where: - Correct answer-
specialist investment managers make the investment decisions to meet the client's
investment objectives
What can be directly attributed to the impact of taxation? - Correct answer-The
individual consumer's ability to make investments
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,Janey met with her financial adviser to discuss, among other things, her budget for
protection needs. When considering Janey's expenditure, how should it be
categorised? - Correct answer-Essential, every day and occasional spending
What is a key consideration for those entering the commercial buy to-let property
market? - Correct answer-Commercial buy-to-let mortgages are not regulated by
the Financial Conduct Authority
Your client, Jayden, is surprised that he is not able to protect his full income in the
event of illness. Why do most insurers limit the amount of benefit they will provide
under Income Protection policies? - Correct answer-To prevent the individual
getting more income than they would by working
At Henry's forthcoming financial review, his adviser wishes to discuss his flexible
whole of life policy. Why do these policies need to be reviewed regularly? -
Correct answer-To ensure the premiums are sufficient to sustain the required level
of cover
Why might Harriet, a 27-year-old working mother of two young children, consider
reviewable critical illness cover? - Correct answer-Premiums are considerably
cheaper than a guaranteed premium policy
Following the Pensions Act 2014, the State pension age is expected to be reviewed
at least every: - Correct answer-6 years
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, Gregor is a member of his firm's defined benefit scheme. What are the main
features of a defined benefit pension scheme? - Correct answer-A fund
administered by trustees where the pension is earnings related
You are reviewing the financial planning needs of a young couple, Simon and Jess,
with two children under the age of 5. What would your general priorities be for
them before they considered saving and investment? - Correct answer-Pay off
expensive debts, protect the family, then put an emergency fund in place
What is the difference between gilts and corporate bonds? - Correct answer-Gilts
are loans to the government, whilst corporate bonds are loans to companies
You have been discussing fund management styles with one of your clients. What
is accurate regarding actively and passively managed funds? - Correct answer-
Passive funds aim to track the market in which they operate, and active funds aim
to outperform it
If Elizabeth makes a potentially exempt transfer as part of her plan to mitigate the
inheritance tax due on her large estate, what should she be aware of? - Correct
answer-The gift must be irrevocable to be effective
Clay, a higher rate taxpayer, has come to you for advice. What would NOT
normally be recommended as a tax planning strategy for him? - Correct answer-
Consider a higher risk investment like an EIS just to qualify for the tax relief
©COPYRIGHT 2025, ALL RIGHTS RESERVED 3
Answers Graded A+
What does the UK Government use to fund its borrowing? - Correct answer-Fixed
interest investments and National Savings and Investments
Gilts are loans to the UK Government. How do they pay out? - Correct answer-
They pay a fixed level of interest at regular intervals
Capital markets developed to meet what objective? - Correct answer-To invest in
assets which offer potential for real growth, and allow companies to raise money
without going to banks
Who oversees the UK payments system? - Correct answer-The Bank of England
Your client, Jeremy, has asked you to confirm what a discretionary portfolio
management service is. You tell him that it is a service where: - Correct answer-
specialist investment managers make the investment decisions to meet the client's
investment objectives
What can be directly attributed to the impact of taxation? - Correct answer-The
individual consumer's ability to make investments
©COPYRIGHT 2025, ALL RIGHTS RESERVED 1
,Janey met with her financial adviser to discuss, among other things, her budget for
protection needs. When considering Janey's expenditure, how should it be
categorised? - Correct answer-Essential, every day and occasional spending
What is a key consideration for those entering the commercial buy to-let property
market? - Correct answer-Commercial buy-to-let mortgages are not regulated by
the Financial Conduct Authority
Your client, Jayden, is surprised that he is not able to protect his full income in the
event of illness. Why do most insurers limit the amount of benefit they will provide
under Income Protection policies? - Correct answer-To prevent the individual
getting more income than they would by working
At Henry's forthcoming financial review, his adviser wishes to discuss his flexible
whole of life policy. Why do these policies need to be reviewed regularly? -
Correct answer-To ensure the premiums are sufficient to sustain the required level
of cover
Why might Harriet, a 27-year-old working mother of two young children, consider
reviewable critical illness cover? - Correct answer-Premiums are considerably
cheaper than a guaranteed premium policy
Following the Pensions Act 2014, the State pension age is expected to be reviewed
at least every: - Correct answer-6 years
©COPYRIGHT 2025, ALL RIGHTS RESERVED 2
, Gregor is a member of his firm's defined benefit scheme. What are the main
features of a defined benefit pension scheme? - Correct answer-A fund
administered by trustees where the pension is earnings related
You are reviewing the financial planning needs of a young couple, Simon and Jess,
with two children under the age of 5. What would your general priorities be for
them before they considered saving and investment? - Correct answer-Pay off
expensive debts, protect the family, then put an emergency fund in place
What is the difference between gilts and corporate bonds? - Correct answer-Gilts
are loans to the government, whilst corporate bonds are loans to companies
You have been discussing fund management styles with one of your clients. What
is accurate regarding actively and passively managed funds? - Correct answer-
Passive funds aim to track the market in which they operate, and active funds aim
to outperform it
If Elizabeth makes a potentially exempt transfer as part of her plan to mitigate the
inheritance tax due on her large estate, what should she be aware of? - Correct
answer-The gift must be irrevocable to be effective
Clay, a higher rate taxpayer, has come to you for advice. What would NOT
normally be recommended as a tax planning strategy for him? - Correct answer-
Consider a higher risk investment like an EIS just to qualify for the tax relief
©COPYRIGHT 2025, ALL RIGHTS RESERVED 3
