Topic 6 - Financial Planning and Informed Decisions Flashcards
Where an individual stands on risk spectrum depends on…
Personality
Amount of money at their disposal
Stage of life cycle
Self-insurance definition
Saving money incase of an event happening rather than going to an insurance company
Why do people save and invest in the medium to long-term?
To spend money eventually on a particular item or life event
To provide for the future
Joint demand definition
Two products are bought together because they are complementary e.g. personal loan to buy a car and motor insurance
Competitive demand definition
Two products fulfil same need or want so are in competition for customer’s money - purchase of one excludes purchase of another.
Inflation definition
Gradual increase in general level of prices in an economy over a period of time
