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The Technical Quiz: 23 October

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To help you to keep up with the fundamentals of tax, retirement and financial planning, try answering these questions…

Question one

An investor in a structured product is typically exposed to counterparty risk with?

A) Product provider

B) Product provider and bond issuer

C) Product provider and investment bank

D) Product provider, bond issuer and derivatives counterparty

Question two

What does a call option on shares give its owner?

A) The obligation to buy a set quantity of the shares at a specified price for a given term

B) The right to buy a set quantity of the shares at a specified price for a given term

C) The obligation to sell a set quantity of the shares at a specified price for a given term

D) The right to sell a set quantity of the shares at a specified price for a given term

Question three

A UK life company realises a capital gain on an investment of £100,000 of £30,000. Inflation over the period of ownership was 10 per cent. What tax liability does the company have?

A) £3,600

B) £4,000

C) £5,400

D) £6,000

Question four

Is it preferable for inheritance tax purposes to hold business assets within a company or outside the company and owned by an individual?

A) Outside the company and personally owned

B) It makes no difference to the owner’s inheritance tax liability

C) Within the company as the business property relief is more beneficial

D) Outside the company and in joint names with a spouse

Scroll down for answers

 

 

 

 

 

 

 

 

 

 

 

 

 

Answers

1) D

2) B

3) B

4) C

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