23/24 Vol 1 Flashcards
- Elsie is very close to her neighbours, Alex & Alan, but not related. She would like to invest £2000 for their new born baby in a JISA, you explain to Elsie…
a) She could make the investment for the baby, but not until she is 1 years old.
b) She could make the investment for the baby, but would need to increase the amount to £9000 to meet the minimum investment rules
c) She cannot make the investment for the baby as a JISA only accepts deposits from direct relatives
d) She can invest into a JISA, but it needs to be overseen by the parents until the daughter is 16
- An investment property is bought for £330,000. The transaction costs totalled £12,000. If the rent received is £1,400 per month, of which 10% is earmarked for general expenses, what will the net yield be?
a) 4.31%
b) 4.79%
c) 5.23%
d) 5.42%
- Chloe wants to invest into a LISA to save for a deposit for her first home in Bath, she needs to be aware that…
a) The maximum property purchase price to secure the bonus is £450,000
b) She can only save regular premiums and not lump sums
c) She can invest up to a maximum of £200 per month
d) She will have to choose between getting the gov bonus or an exemption from Stamp Duty Land Tax
A
- If Karl purchases a corporate bond ‘cum dividend’, how much of the next distribution payment will be subject to income tax?
a) All of it
b) Only the equalisation element
c) Only the income element
d) None of it
- Georgia and Helen both hold UK Treasury stock. Georgia’s has a coupon of 6% and is currently priced at £127. Helen has a coupon of 4% and is currently priced at £114. The respective running yields are:
a) Georgia 3.51% & Helen 4.72%
b) Georgia 4.72% & Helen 3.51%
c) Georgia 21.17% & Helen 11%
d) Georgia 11% & Helen 21.17%
- Anushka invested £15,000 into her flexible ISA at the start of this tax year. She withdrew £9,000 in October but now has enough cash to maximise her contributions. How much can she add?
a) £5,000
b) £6,000
c) £9,000
d) 14,000
A
- Peter has a GILT that has 15 years exactly remaining. He has been advised that the GILT is strippable, so is thinking of utilising this feature to sell part of the GILT holding. He has asked you to explain how many separate securities the GILT can be stripped into…
a) He is incorrect. GILTS cannot be stripped and must remain as a security
b) 15
c) 30
d) 31
D - Cannot remember the wording why but I know it’s D
- Hattie has been regularly saving into a Help to Buy ISA, why might she want to switch this into a LISA?
a) She can save in cash within the LISA, whereas she can only invest in S&S within a Help to Buy ISA.
b) The bonus levels are higher on the LISA
c) the annual bonuses can be removed from the Help to Buy ISA
d) She wishes to save regularly but also add ad-hoc lump sums gifted from her family
D - Can only add a lump sum in the first month of the Help to buy ISA
- Carla has asked you which ‘index’ the returns on index-linked savings certificates are link too, you correctly tell her that it’s…
a) The government Annuity Department (GAD) rates
b) Retail Price index (RPI)
c) Consumer Price index (CPI)
d) Financial times stock exchange (FTSE)
B
- From the companies listed below, which has the lowest dividend yield?
a) Company 1
b) Company 2
c) Company 3
d) Company 4
- Randolph has several directly-held fixed interest securities and has asked about the key difference between net and gross redemption yields…
a) The net redemption yield is more accurate as it takes into account the tax status of the investor
b) The net redemption yield takes into account the 20% income tax taken at source
c) The net redemption yield uses the dirty price in its calculation whereas the gross redemption yield uses the clean price
d) The gross redemption yield does note take into account any loss nor gain that would be made at redemption
- An investment manager is looking to diversify his portfolio. When considering the correlation of assets, he is likely to choose those that have a:
a) Positive correlation
b) Negative correlation
c) non-correlation
d) Neutral correlation
- Sophie, aged 17 has a JISA invested in Stocks and Shares that was originally set up by her parents. When considering the characteristics of this you would note that…
a) All interest earned by Sophie will be classed as her parents until she reaches 18
b) She must transfer the ISA into cash when she turns 18
c) She cannot access the money until she is aged 18
d) She could transfer this to a Child Trust Fund to get a better rate of interest
- Bruce purchased an investment property for £170,000, with additional costs of £7,500. The rent has been set at £700pm and Bruce estimates that ongoing costs to be 20% of the rent. What will the net yield be?
a) 3.79%
b) 3.95%
c) 4.73%
d) 4.94%
- Jessie is using the shelter of a limited company to purchase a residential property for £1.8m. What would the Stamp Duty Land Tax liability on this purchase?
a) £36,000
b) 128,750
c) £180,000
d) £270,000
