Topic 1

Question 1

What is a Need?

Answer 1

An essential “must have” item that everyone must have to survive

Question 2

What is a Want?

Answer 2

An optional “nice to have” item that are desirable to have but not essential

Question 3

What is an Aspiration?

Answer 3

Hopes and dreams for the future, they can be items or experiences people wish to have in the medium to long term future

Question 4

What could be an want for a teenager?

Answer 4

Social Interaction
Material goods (phones)

Question 5

What could be a aspirations for a mature adult?

Answer 5

Children
Career Promotion

Question 6

What are factors that may influence needs, wants & aspirations

Answer 6

Lifestyle
Size of Family
Ability to afford products

Question 7

What are types of finance that can be used to satisfy needs, wants & aspirations?

Answer 7

Medium- term & long-term savings
Investments
Pensions
Insurance
Longer term borrowing

Question 8

What are some examples of internal factors that influence needs, wants & aspirations?

Answer 8

Values
Beliefs
Attitudes
Perceptions
Preferences

Question 9

What are values and how do they help?

Answer 9

General feelings & beliefs about desirable behaviours and goals

They help distinguish what they consider to be needs and what they consider to be wants

Question 10

What are beliefs?

Answer 10

They’re less about the way things ought to be and more about how they actually are

They are more specific and detailed than values

Question 11

How can beliefs be described?

Answer 11

“Absolute Beliefs” something they firmly believe in
“Casual Beliefs” which explains how one event can cause or make another event happen

Question 12

What are attitudes?

Answer 12

They refer to how, at a given time or place, people think and feel about another person, event or issue

Question 13

How do attitudes influence needs, wants and aspirations?

Answer 13

They affect how someone acts or feels about certain things

Question 14

What is a perception and how do they affect needs, wants and aspirations?

Answer 14

They represent someone’s understanding of the world around them, not just physically but also socially

Can affect how they perceive financial products

Question 15

What do preferences depend on ?

Answer 15

People have certain preferences for particular products, which mostly depend on personal values, beliefs & attitudes

Question 16

How can preferences affect what financial product someone chooses?

Answer 16

Businesses must provide a good range of products that suit all tastes as people prefer different goods and services

Question 17

How is one way someone can express their preferences?

Answer 17

The distribution channel they choose to use
At a branch (usually older people)
By phone
Online

Question 18

What is Promotion?

Answer 18

Refers to paid for marketing activities, which includes advertising

Question 19

What do the activities aim to achieve?

Answer 19

Communicate with people
Inform them of goods & services
Persuade them to buy

Question 20

What is advertising?

Answer 20

Used to inform that a product is available & to persuade people to buy the product

Question 21

Advertising is carried by the media, where can you find it?

Answer 21

Television
Online
Posters/Billboards
Radio
Newspapers

Question 22

What is one reason customers should be careful when choosing a financial product through promotion/advertising?

Answer 22

Sometimes a bonus or discount may only be available in certain circumstances, customers should be aware of this so they aren’t misled

Question 23

What is another reason customers should be careful?

Answer 23

There are a lot of ‘small print’ (terms and conditions)
This determines the amount of interest received on a savings account & the amount of interest and fees charged on a loan

Question 24

What is PR (Public Relations) ?

Answer 24

Advertising that is not paid for directly, but keeps a businesses product in the public eye

Known as “below the line” expenditure

Question 25

What is an example of PR?

Answer 25

A celebrity carrying a bag that displays a banks logo

Question 26

Why can PR have a bigger impact than a usual advert?

Answer 26

People identify themselves with celebrities/ influencers, seeing them display a certain logo may influence them into buying the product

Question 27

What is product placement?

Answer 27

When a product appears on TV, in a show or a film

Question 28

What is a sponsorship?

Answer 28

It involves a business paying for an event or a venue

Question 29

How can sponsorship benefit a business?

Answer 29

The ability to advertise at the event and in the promotional materials
Its name being included in the entire name of the event

Question 30

What is the feedback effect?

Answer 30

People’s own attitudes mean they affect the outcome of events

Question 31

What are examples of personal values that can affect financial decisions?

Answer 31

Ethical Investing
Managing Finance
Religious Beliefs

Question 32

What is Ethical Investing?

Answer 32

It involves someone choosing to save in a way that means the money will be used for what an individual considers to be for good purposes

Question 33

What is managing finance?

Answer 33

Persons financial choices are affected by how well they feel they can manage the cost and consequences

Question 34

What is another personal value that influences financial decisions?

Answer 34

Religious Beliefs

Question 35

How can attitudes to risk affect your financial decisions?

Answer 35

People see risk in different ways
Some are cautious and tend to avoid risky situations (Risk adverse)
Others find it exciting to take risks (Risk Tolerant)
And others will fall between these extremes