Sistemas Producto-Servicio

1) Which of the following might be regarded as a disadvantage of an interest-only mortgage?

(9.1.1.2)

A The interest rate charged is usually higher than for a repayment mortgage.

B The outstanding capital remains constant throughout the mortgage term.

C The mortgage cannot be arranged on a monthly or a daily rest basis.

D The mortgage term cannot be longer than that of any repayment vehicle.

2) Charles has a capital and interest tracker mortgage - which of the following is a correct description ? (9.1.2.5)

A capped

B fixed.

C LIBOR -linked D variable rate

3) Anne has a mortgage with a 2% discount over the first two years. At the end of the discount period her payments : (9.1.2.4)

A are expected to increase.

B are expected to decrease.

C are expected to stay the same.

D could decrease or increase, depending on prevailing interest rates.

4) Personal loans are offered by banks, building societies and some finance houses. The purpose of the loan determines whether it is regulated under the terms of the

(9.3.1)

A Consumer Credit Act 2006 B Financial Services Act 1986 C Investment Services Directive D Financial Services Action Plan

5) Which of the following would be a benefit to a couple who have a tracker mortgage linked to a stocks and shares ISA ? (9.1.2.5)

A The addition of reversionary bonuses B A rise in the rate of inflation

C A rise in the FTSE 100 index D A rise in interest rates

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Topic 10 – Specimen Questions Regulatory authorities in the UK

1) Supervisory powers for the financial services industry are delegated to the Financial Services Industry under the Financial Services and Markets Act 2000 by the : (10.3)

A Chancellor of the Exchequer

B Secretary of State for the Department of Business, Innovation and Skills C EU Commissioner for Financial Markets

D Governor of the Bank of England

2) Which of the following defines regulated investments ? (10.3.3) A FSMA 2000

B The Regulated Activities Order 2001 C The Regulated Investment Act 2002 D The Bank of England

3) Which of the following is not one of the FSA’s Statutory objectives ? (10.5) A EU harmonisation of financial services

B Market confidence C Consumer protection D Reducing financial crime

4) Which of the following would be exempt from the Consumer Credit Act 2006 regulations ? (10.7.1)

A A loan to a small partnership for £26,500 B A loan to a self-employed builder for £15,500 C A loan to a small business for £30,000

D A loan to an individual for £25,000

5) Which of the following is not deemed to be included in the terms of the Supply of Goods and Services Act 1982 ? (10.7.4)

A The work will be done to a specified standard.

B The work will be done with reasonable care.

C A reasonable charge will be made

D The work will be done within a reasonable time

40 6) Any firm applying for permission to carry out a regulated activity must satisfy the

FSA that it is fit and proper, by meeting a set of threshold conditions. Which of the following is not one of those conditions ? (10.3.1)

A Close links

B Adequate resources C Legal status

D Accountability

7) The tripartite system of regulation comprises : (10.4) A HM Treasury,The Office of Fair Trading and The FSA B The FSA, The Bank of England and the Home Office C The Bank of England, HM Treasury and The FSA

D The FSA, HM Treasury and the Department for Trade and Industry (DTI) 8) What is the function of the Pensions Regulator ? (10.7.2)

A To advise the FSA on the regulation of occupational pension schemes.

B To deal with complaints about the running of pension schemes.

C To give advice and general information about pension schemes.

D To protect the benefits of members of work-based pension schemes.

9) Jack’s complaint to his credit card company under the Unfair Terms in Consumer

Contracts Regulations Act 1999 is still unresolved – to whom can he now take his complaint ? (10.7.5) A The Office of Fair Trading

B The Financial Ombudsman Service C The Consumer’s Association

D The FSA

10) Which one of the following contracts would be subject to the Unfair Terms in Consumer Contracts Regulations 1999 ? (10.7.5)

A A contract between two businesses for the supply of metal sheeting.

B A contract for the sale of a house between a private seller and buyer.

C An individually negotiated contract for the sale of a fitted kitchen.

D A standard service contract between an electrical company and a consumer.

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Topic 11 – Specimen Questions International regulation

1) The implementation of financial regulation across EU member states is carried out under which overarching programme ? (11.4.1)

A Financial Services Action Plan

B Financial Services and Markets Act 2000

C Markets in Financial Investments Directive (MiFID) D Insurance Mediation Directive

2) Regulations concerning minimum capital adequacy requirements for banks, are focused on which of the following ? : (11.1.1)

A Basel Accord B Banking Act 1987

C Financial Services and Markets Act 2000 D FSA Conduct of Business rules

3) The effect of the 1988 ‘Basel Accord’ was that any losses made when bank customers defaulted on their loans should be borne by the bank’s : (11.1.1)

A Depositors B Directors C Regulators D Shareholders

4) The Basel Committee on Banking Supervision is a multinational committee of which of the following institutions ? (11.1.1)

A The Bank of England

B The Bank of International Settlements C The European Parliament

D The European Central Bank (ECB)

5) Which one of the following is not one of the specific objectives of the Financial Services Action Plan ? (11.4.1)

A Open and secure retail markets B A single market for financial services

C State of the art prudential rules and supervision

D A single regulatory authority for all financial services in the UK

42 6) The Life Directive of 2002 stipulated that for policies that carry an investment risk, a

life assurance company’s required minimum solvency margin is what percentage of its mathematical provisions ? (11.2)

A 4%

B 99%

C 100%

D 104%

7) Under Basel 11, the minimum capital requirements are calculated by multiplying the institution’s gross income by : (11.1.1)

A 0.1

B 0.15

C 4%

D 8%

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Topic 12 – Specimen Questions