R01 Mock Test 3

Front 1

Which organisation is considered to be the 'voice' of the UK Banking System in matters of payment issues such as plastic cards and card fraud?

Back 1

The Payments Council


Ch1 B2A

Front 2

The UK financial services industry is subject to regulations impose by whom?

Back 2

Both the European Union and the UK Government

Ch1 C

Front 3

Which of the following interventions has led to a SIGNIFICANT reduction in yield on equity-based products and equities in recent years?

Back 3

Withdrawal of the right to reclaim tax credit on Uk dividends

Ch1 D1

Front 4

'Quantitative Easing' has been introduced by the Bank of England (BOE) during the recent Banking crisis. What does this entail?

Back 4

The BOE buying back gilts and corporate bonds from the financial sector
Ch1 D2B

Front 5

Which of the following is NOT a mandatory requirement for a suitability report?

Back 5

Listing products which were considered but discounted

Ch2 A6

Front 6

Which of the following is NOT an example of an Interest Rate Option for a Capital Repayment Option?

Back 6

Roll Up Rate


Ch2 B2C

Front 7

What would be considered a medium term investment?

Back 7

5-15 years


Ch2 B5A

Front 8

BS issue a form of fixed interest investment called a?

Back 8

Permanent Interest Bearing Share

Ch2 B6B

Front 9

Which state funded retirement provision was introduced on April 6th 1978?

Back 9

State Earnings Related Pension Scheme (SERPS)

Ch2 B8A

Front 10

Steven's brother died in December 2009. It is possible that Steven would qualify for a one off tax-free Bereavement Payment of £2,000. Which of the circumstances listed below is NOT a consideration for Steven to qualify for this benefit?

Back 10

Steven must be working over 16 hours per week at the time of death
Ch2 B10I

Front 11

Which body currently administers working tax credit to employees?

Back 11

HMRC


Ch2 B10E

Front 12

James and Georgina are partners in a medical practice. There is no partnership agreement in place? What is their individual liability for debts run up by the business and their own tax bills?

Back 12

Jointly liable for 100% business debts but only liable for their personal income tax.
Ch3 A1 & A2

Front 13

What is the difference between the share capital of a private limited company and a public limited company (PLC)?

Back 13

The private limited company cannot advertise its shares for sale
Ch3 A4

Front 14

In which of the following situations would a Trustee NOT a removed from his duties?

Back 14

On reaching the age of 80 years


Ch3 H4D

Front 15

Which of the following events will not automatically revoke a Power of Attorney?

Back 15

Return from overseas secondment of the donor

Ch3 H4D

Front 16

Which if the following us a key difference between Enduring Power of Attorney and Lasting Powers of Attorney?

Back 16

Enduring Powers of Attorney do not cover Health Care Provision.

Ch3 B1 & B1A

Front 17

After reading an advertisement from Consolidated Life for an Income Protection Policy. Norman requested some further policy details He has now received these details and having decided he would like to proceed with the policy, he has completed and returned the proposal form. How is the proposal form classified under contract law?

Back 17

Offer

Ch3 C2

Front 18

Nathan has recently arranged life cover with an insurance company through an IFA. Which of the following us true regarding the Law of agency?

Back 18

The IFA owes a duty of care to the client
The IFA owes no duty of care to the insurer
The Client is responsible for the acts of the IFA
Ch3 D

Front 19

What would be a fundamental reason for a bankruptcy order to be granted against an individual?

Back 19

Failure to provide for liabilities such as tax bills.

Ch3 F1 & F2

Front 20

What best describes the role of the Bank of England?

Back 20

Set inflation targets.

Ch4 A1B

Front 21

Which of the following best describes the EU Directive?

Back 21

Desired results binding on Member states, but methods to achieve left to national authorities.

Ch4 C Fig 4.1

Front 22

Passporting rights arise under the EU single market directive, what does this mean?

Back 22

Treaties have been agreed allowing advice to be given across EEA States.

Ch4 C

Front 23

Under Capital Requirements Directive (CRD) what do the three pillars of Basel II focus on?

Back 23

Risk management to strengthen the stability of the international banking system
Ch4 C3

Front 24

The Pension Regulator (TPR) took over from OPRA as regulator from 6 April 2005. What types of pensions are covered by TPR?

Back 24

Occupational pension schemes and personal pensions for employees
Ch4 D3

Front 25

Who takes overall responsibility of how a firm is managed?

Back 25

Senior management


Ch4 E1

Front 26

Which of the following non-FSMA legislation acts does the FSA have regulatory powers under?

Back 26

Industrial & Provident Societies Act 1965
Friendly Societies Act (1974 & 1992)
Data Protection Act 1998
Ch5.1 A1

Front 27

Which piece of secondary legislation under FSMA sets out the specific activities for which firms receive FSA permission or authorisation?

Back 27

Financial Services & Markets Act (Regulated Activities) Order 2001

Ch5.1 A1

Front 28

The FSA receives many complaints from intermediaries who believe a firm's new equity-release scheme and Key Facts document breach advertising rules. Which non-FSMA legislation designates the FSA the ability to consider and, if necessary, take action against the firm?

Back 28

Unfair Terms in Consumer Contracts Regulations 1999

Ch5.1 A1

Front 29

When a client seeks investment advice, the regulator promotes consideration of the needs consumers may have for information and advice, whilst also differentiating their experiences and varying levels of expertise. This would fall under which of the FSA's statutory objectives?

Back 29

Securing the appropriate degree of protection for consumers
Ch5.1 B3

Front 30

The FSA is deliberating on what sanctions it should take, regarding a senior trader who has been accused of insider dealing. Which statutory objective would the perpetrator's offence fall under?

Back 30

Reduce the extent to which it is possible for a regulated business to be used for a purpose connected with financial crime
Ch5.1 B4 & Ch5.2 C5

Front 31

On 1st September 2006, the FSA replaced the Money Laundering sourcebook with which sourcebook and high level provisions for anti-money laundering?

Back 31

Senior Management Arrangements, Systems and Controls
Ch5.1 B4

Front 32

If a new financial services firms was proposing to conduct regulated activity, which of the FSA's four main functions would their application to do so fall within?

Back 32

Authorisation matters


Ch5.1 C1 - Fig 5.2

Front 33

A firm handling compensation claims claims has received many complaints concerning their poor success rate in obtaining appropriate redress and compensation for their customers. Which of the following statements correctly describes this area of financial services?

Back 33

Not currently regulated by the FSA

Ch5.1 C1

Front 34

What is the Bank of England's statutory objective, which is also shared with HM Treasury and the FSA?

Back 34

To contribute to protecting and enhancing the stability of the financial systems of the UK
Ch5.1 E1

Front 35

The individual occupying oversight function for XYZ IFA retired last year but in these times of austerity they were not replaced by a suitably qualified person. Consequently, the junior compliance administrator had taken on the responsibility for all aspects of the firms compliance monitoring. Following an ad hoc inspection, what can the FSA request the firm provide them with to alleviate their concerns regarding the firms' compliance function?

Back 35

Section 166 (Skilled Persons) Report

Ch5.1 C2

Front 36

In its day to day relationship with authorised firms, how does the FSA prioritise risks in its risk-based approach to supervision?

Back 36

Impact and Probability Analysis


Ch5.1 D1

Front 37

The nature and extent of the FSA's supervisory relationships depends on the extent firms' risks could pose on its statutory objectives. Given the FSA is unable to closely supervise all regulated firms on a day to day basis, it employs a risk-based methodology called?

Back 37

Advanced Risk-Responsive Operating Framework

Ch5.1 D1

Front 38

Authorised firms must comply with FSA Principles at all times. However, if there was ever any conflict between FSA rules and principles, which takes precedence?

Back 38

FSA Principles


Ch5.2 A1B & Ch6 A1 & Ch9 A1

Front 39

The FSA has fined Firm A £250,000 for market abuse and Firm B £120,000 for insider dealing. What does this indicate?

Back 39

Neither firms have received the maximum fine or sanction for their respective offences

Front 40

What is the maximum penalty for the criminal offence for making misleading statements or engaging in misleading conduct?

Back 40

An unlimited fine or a 7-year prison sentence

Ch5.2 C5

Front 41

To whom can a firm appeal against a decision made by the Financial Services & Markets Tribunal?

Back 41

To the Court of Appeal, but only on a point of law

Ch5.2 D1C

Front 42

Life Offices' senior management controls should..?

Back 42

be reviewed regularly by way of risk assessments and continual monitoring
Ch5.2 A1C

Front 43

What is the statutory time limit for the FSA to consider complete applications for authorisation?

Back 43

Six months


Ch6 A4

Front 44

Martin has been running an IFA firm in partnership with Jordan for five years. Unfortunately, Jordan has been killed in an accident. What are the requirements for Martin to continue being authorised by the FSA?

Back 44

The existing authorisation for the firm will continue.

Ch6 A4

Front 45

The Thoresen Review recommended that the Money Guidance service should have which of the following characteristics?

Back 45

National, impartial and sales free


Ch7 A1B

Front 46

What is the maximum permitted charge in the 11th year for a stakeholder pension and a stakeholder medium term investment product where both have fund values of £8k?

Back 46

£200


Ch7 A3

Front 47

Which of the following is NOT one of the 11 FSA Principles for Businesses (PRIN)?

Back 47

Compliance


Ch9 A1

Front 48

Which of the following FSA Principles for Businesses covers Ethics?

Back 48

Integrity
Skill, care and diligence
Customers' interests

Front 49

Which of the following is one of the key cultural drivers for Corporate Culture identified by the FSA?

Back 49

Decision making


Ch9 B1

Front 50

Which of the following may be considered a breach of ethical requirements?

Back 50

Criticising a colleague in an open office

Ch10 A1

Front 51

Maggie works for an IFA. She has been called to a disciplinary hearing to discuss a failure to behave ethically. This is because she:

Back 51

Made a recommendation for a product which she did not understand
Ch10 C2

Front 52

Which process did the Walker review 2009 find to be insufficient amongst banks regarding evidencing their ethical behaviour?

Back 52

Challenge


Ch10 B4C

Front 53

Which of the following are regulated by the FSA?

Back 53

Government securities
Cash deposits
Cash deposits
Electronic money
Rights under insurance contracts
Ch6 A2

Front 54

Guy is an Introducer Appointed Representative (IAR), which of the following activities is he authorised to carry out?

Back 54

Providing information on investments
Making introductions to regulated individuals
Distributing advertisements
Ch6 B1

Front 55

Which of the following bodies are EXEMPT from FSA authorisation?

Back 55

The UK subsidiary of a Swiss bank
Surrey County Council
The Institute of Actuaries
Ch6 A3