Specimen paper A Flashcards
Which of the following is an example of a ‘want’?
Jewellery (B)
Which of the following is an example of an aspiration for a young adult?
Getting a good job.
This is an aspiration, as it is something to achieve over a period of time.
An investment, when compared to a savings product, is generally:
more risky but can bring in a higher return.
Advertising can carry:
both explicit and implicit messages.
Which of the following helps people to decide their general approach to financial matters?
Values.
A budget is a personal financial plan that usually covers a period of:
One month.
Which of the following is most likely to be a medium-term goal of someone aged 40?
move to a larger house.
The main purpose of a budget, as part of a financial plan, is to:
Avoid getting into financial difficulties.
Opportunity cost can be defined as the:
Cost of something in terms of what has to be given up to achieve it.
Which of the following is not an example of a significant, life-changing event?
A car failing an MOT.
Which of the following financial products is the most appropriate for someone to use as ‘rainy day’
money?
Instant access savings account.
Medium-term and long-term financial planning is carried out because people want to achieve their:
Aspirations.
James, aged 35, is buying his first property for £150,000. The mortgage would usually be repaid
over a period of:
25 years.
Gethin and Nia are both in their twenties and would like to start planning for their retirement. At what
age should they start putting money aside towards their retirement planning?
As soon as possible.
When considering returns in savings accounts, the ‘real’ return takes into account the interest rate
and:
Inflation.
In the UK, a number of benefits have been replaced by a single monthly payment for some people
who are out of work or on a low income.
This is known as:
Universal Credit.
Which of the following organisations provides advice and guidance to an individual dealing with
personal debt?
MoneyHelper.
Which of the following best describes a financial footprint?
It is a record of:
all of a person’s financial transactions.
The relationship between risk and reward is based on the idea of:
high reward/high risk
Which of the following financial products carries the lowest risk?
Premium Bonds
Which of the following factors is applicable to an investment trust but not a unit trust?
Allowed to borrow money.
People who are willing to borrow money in order to buy a property are best described as having:
an average degree of risk tolerance.
When a person passes risk to someone else, for instance by taking out an insurance policy, this is
known as risk:
transfer.
Ranesh and Geeta have two small children and want to put some money aside each month for the
long-term. They are both risk tolerant. Which of the following are they most likely to choose?
Unit trust.
Which of the following is not an investment product?
Property.
Which of the following taxes might be paid when an individual sells a valuable painting?
Capital gains tax.
Which of the following is covered up to £85,000 by the Financial Services Compensation Scheme?
Bank deposits.
What is the annual ISA allowance for an adult paying into a stocks and shares ISA and a cash ISA,
in the same tax year?
They:
can contribute up to a maximum allowance in one or both types of ISA.
When borrowing money to buy a property, the ratio of the money borrowed to what the property is
worth is known as the:
Loan-to-value (LTV).
Hire purchase agreements are regulated by the:
Consumer Rights Act.
Under which law is it forbidden to borrow or lend money for interest?
Sharia law
What is meant by a halal investment?
It must:
pay out dividends twice a year.
Derived demand is where a financial product is demanded because it enables people to:
achieve their wants.
Which of the following is not available from MoneyHelper?
Face-to-face advice at a number of centres.
A financial adviser who can only recommend certain types of product from one provider, or a limited
number of providers, is called:
A restricted adviser.
