Btec Unit 3 Personal Finance (1)

Which of the following is NOT a function of money?

• Interest rate

• Means of exchange

• Legal tender

• Unit of account

Which of the following is NOT a method of saving or investment?

• Premium bonds

• Shares

• Current account

• Gilts

Which of the following would NOT be taken into account by an insurance company when deciding whether or not to accept an application for a life insurance policy?

• Age of applicant last birthday

• The occupation held by the applicant

• Number of children the applicant has

• Whether the applicant is a smoker

Which of the following sources of finance would be MOST suitable for a one-off or infrequent purchase, e.g. a TV or laptop?

• Bank loan

• Leasing

• Hire purchase

• Mortgage

A disadvantage of using payday loans as compared to bank loans is:

• Payday loans have to be paid back

• A payday loan will not be given if you have a poor credit rating

• The interest on a payday loan is higher than on a bank loan

• A payday loan is only available for 3 months

What do personal attitudes, life stages, culture and external influences affect?

• The role of finance

• The role of money

• The role of a financial advisor

• The role of a credit union

Which of the following is the MOST important reason for an individual to avoid getting into unmanageable debt?

• It might affect their credit rating

• They will not be able to socialise

• It might lead to arguments with loved ones

• It might mean they have to sell assets to pay bills

Inflation affects the value of money. If a meal costs £8.00 and you earn £8.00 per hour, an hour of work will get you a meal. If then the price of the meal increases by 10%, how long will you now have to work to pay for it?

• 54 mins

• 60 mins

• 66 mins

• 70 mins

Which of the following is NOT a method of payment that can be made from a current bank account?

• Cheque

• Debit card

• Store card

• Direct debit

A direct debit has many features. Which of the following is NOT a feature of a direct debit?

• It is an agreement made with a bank allowing them to make regular transfers to another account

• It is an agreement allowing a third party to withdraw money from an account

• Withdrawals are made on a set day to pay for goods and services, e.g. bills

• Withdrawals are variable, e.g. a different amount can be taken each time