unit 3 - Section A

Section A & Section B = 80 marks

Unit 3

Personal and Business Finance

Section A - 28 marks

Personal Finance

Learning Aim A

Learning Aim B

Multiple Choice

How many institutions offer consumer protection in the personal finance industry?

• 3

• 4

• 5

Multiple Choice

What is the marks allocation for Personal Finance and Business Finance?

• 28 marks and 52 marks

• 20 marks and 60 marks

• 40 marks and 40 marks

Open Ended

What are the four functions of money?

Must have a fair credit rating

No banking fees

Cheque book and debit card provided

Overdraft available

Types of Current Accounts

For learners in Higher Education

Interest free overdraft to a certain limit

Debit card

Student discounts/travel discounts

1. Basic

Standard account with additional benefits

Monthly fee

Benefits ( travel insurance, cashback, etc.)

Interest on credit/positive balances

Lower interest on overdraft

Not all benefits may be used by account holder

2. Standard

3. Premium/packaged

4. Student

No frills account

For people with poor credit rating

No overdraft

No credit card

Only debit card

No banking fees

Multiple Choice

Which of the current accounts do not charge interest on overdrafts...?

• Basic Current Account

• Standard Current Account

• Premium Current Account

• Student Current Account

Open Ended

What are the types of interest rates?

Types of Borrowings

1. Overdraft

2. Personal Loan

3. Hire Purchase

4. Mortgage

5. Credit cards

6. Payday loans

Multiple Choice

Which of the borrowing options has the lowest rate of interest?

• Payday loans

• Mortgages

• Hire Purchase

• Overdraft

Risk and Return Relationship

" Savings options have higher security/lower risk and hence lower returns "

" Investment options such as shares have higher risk/lower security and potential higher returns"

" The return on savings may be eroded if the interest rate on the account is below the rate of inflation"

Types of Savings and Investments

1. ISAs

2. Deposit and Savings Accounts

3. Premium Bonds

4. Bonds and Gilts

5. Shares

6. Pensions

Types of Insurance Products

1. Car/Motor

2. Life Insurance and Assurance

3. Pet Insurance

4. Health Insurance

5. Home and contents Insurance

6. Travel Insurance

Home Insurance - 12 marks

Examiner's report

Investment - 10 marks

Examiner's report

Multiple Select

What are the types of car/motor insurance...?

• Third Party Car Insurance

• Third Party, Fire and Theft

• Comprehensive Car Insurance

Life Insurance - 12 marks

Examiner's report

Multiple Choice

Which financial institution: offers loaned money against the security of a personal asset, for example jewellery?

• Pension Companies

• Insurance Companies

• Pawn Brokers

Open Ended

Provide 2 features of a Building Society

Customer Communication methods:

1. Bank Branch

2. Telephone Banking

3. Postal Banking

4. Online Banking

5. Mobile Banking

Subject | Subject

Consumer Protection is offered by:

1. Financial Conduct Authority (FCA)

2. Financial Ombudsmen Service (FOS)

3. Financial Services Compensation Scheme (FSCS)

4. Consumer Credit Legislation

Multiple Choice

An organisation appointed by the government to represent the interests of the consumers in disputes with financial providers:

• Financial Conduct Authority

• Financial Ombudsmen Service

• Financial Services Compensation Scheme

• Legislation: Consumer Credit

Consumer Credit Legislation

" Regulates card purchases and gives consumers protection when signing loans and hire purchase agreements.

It covers interest rates, credit limits, cooling off periods and access to credit files " 

Open Ended

Fiona decided to treat herself to television. She signed a credit agreement amounting to £46000. The TV was due to be delivered in 10 days. When she got home she had a chance to think about what she had done and decided to cancel the agreement.

Which consumer protection organisations can she turn to?

Multiple Choice

An organisation in the UK that will pay compensation to a consumer for financial loss if financial services provider is unable to:

• Financial Conduct Authority

• Financial Ombudsmen Service

• Financial Services Compensation Scheme

Multiple Select

Which of the following are functions of FCA?

• To regulate the conduct of financial services providers

• To ensure consumers are provided with a wide range of financial products and services

• To compensate the consumers upto £85,000 incase of financial losses

• To regulate credit card purchases

Consumer advice is offered by:

1. Citizens Advice

2. Independent Financial Advisers

3. Price Comparison Websites

4. Debt Counsellors

5. Individual Voluntary Arrangements

6. Bankruptcy