Topic 1

Question 1

Affordability

Answer 1

An important concept in helping people to choose financial products, based on budgeting and forecasting to help individuals decide what they can afford to spend

Question 2

Aspirations

Answer 2

Things or experiences people would like to have in the future, e.g. owning a home, luxury holiday or a sports car

Question 3

Attitudes

Answer 3

People’s thoughts and feelings, at a given time and place, about another person, event or issue. Usually general and limited to socially significant events, can be changed by circumstances, events, experience or advice.

Question 4

Beliefs

Answer 4

Specific and detailed personal convictions about how things are. Can be religious but also otherwise, and can be ‘absolute’ (A is acceptable but B is not) or ‘causal’ (cause A leads to effect B)

Question 5

Capital

Answer 5

The money or other assets owned by an individual or a business. In the case of financial service providers, it refers to finds provided by shareholders, not customer deposits

Question 6

Consumer Credit

Answer 6

Another term used for borrowing.

Question 7

Credit card

Answer 7

A card that allows face-to-face, telephone or online purchases, and ATM withdrawals. Instead of being taken from the holder’s own account, the provider pays for the transactions. Card holder repays amount in one payment or instalments - provider charges interest etc.

Question 8

Culture

Answer 8

A society’s set of norms about behaviour and attitudes across social groups - what society constitutes to be acceptable and unacceptable

Question 9

Deposit

Answer 9

A sum of money placed by a customer with a financial services provider

Question 10

Distribution Channel

Answer 10

The medium through which information is transferred to its intended recipient, e.g. email, telephone. Refers to the way a customer can contact their provider and manage their account. Also called communication channel.

Question 11

Ethical Investing

Answer 11

Someone choosing to save in a way that the money will be used in what the person considers to be good purposes.

Question 12

Feedback effect

Answer 12

The notion that thoughts and feelings have a direct influence on behaviour - as expectations can be self fulfilling, people’s attitudes affect event outcomes

Question 13

Hire Purchase

Answer 13

A type of secured consumer credit to finance items such as cars and furniture, which involves the borrower repaying over a number of years

Question 14

Investments

Answer 14

Money paid into financial products, the aim is that the value of the product will grow over time and so the person will eventually receive back more money than they paid in.

Question 15

Life Assurance

Answer 15

A type of insurance policy that pays out a sum of money if the insured person dies

Question 16

Life Cycle

Answer 16

The stages through which people pass between birth and death, including childhood, teenage years, young adult, mature adult and old age. Not everyone passes through all stages, or at the same ages.

Question 17

Marketing

Answer 17

Advertising, selling, delivering products to customers. Everything a company does to acquire customers and maintain a relationship with them, including promotion and PR.

Question 18

Mortagage

Answer 18

A loan taken out to pay for a property, usually over a long term, e.g. 25 years

Question 19

Needs

Answer 19

Things that a person needs to survive, such as food, basic clothing and somewhere to live

Question 20

Peers

Answer 20

Our equals - people in the same position as us, for instance of the same age

Question 21

Pension

Answer 21

An income that people receive after retiring from work. In the UK state pension is provided, other pension payments from employment schemes or their own arrangements.

Question 22

Personal loan

Answer 22

A product that allows someone to borrow a fixed amount over a fixed period at a fixed amount of interest

Question 23

Product placement

Answer 23

An aspect of PR involving a product appearing in a TV show or a film

Question 24

Promotion

Answer 24

Paid for marketing activities, including advertising. Includes all activities that aim to communicate, inform people of goods and persuade to buy.

Question 25

Public Relations PR

Answer 25

Promotion known as ‘below the line’ expenditure, which is advertising not paid for directly but keeps a business’ product in the public eye, the entire message is implicit

Question 26

Repossession

Answer 26

A legal process where a financial institution takes ownership of an asset, often a house, because loan repayments have not been met. Last resort in the process of recovering money owed

Question 27

Risk tolerant

Answer 27

Willing to take risks

Question 28

Secured Loan

Answer 28

A loan secured against an asset, such as a house. If the borrower does not keep up repayments on the loan, the lender can seize the asset and sell it to recover the money owed.

Question 29

Sponsorship

Answer 29

An aspect of PR involving a business paying for a sporting or entertainment event or venue. It can advertise at the event and in the promotional materials, and the business name may be included in the event or venue name

Question 30

Values

Answer 30

General feelings about desirable behaviour and goals, involving concepts of good and bad and how people think things ought to be

Question 31

Wants

Answer 31

Things that people would like to have but can survive without, such as entertainment, fashionable clothes.