Finance topics 6-10

Question 1

What is APR?

Answer 1

Annual percentage rate

Question 2

What is the annual percentage rate?

Answer 2

The cost of borrowing

Question 3

Which law states APR has to be quoted?

Answer 3

Consumer credit directive 2008

Question 4

What type of account has an overdraft?

Answer 4

A current account

Question 5

What is EAR?

Answer 5

Equivalent annual rate

Question 6

What does the EAR show?

Answer 6

The rate you would pay if you remained overdrawn on current account

Question 7

what financial product is EAR quoted on?

Answer 7

Loans

Question 8

What are the costs of credit cards?

Answer 8

Annual subscription rate, late payment fees, over-limit fees, cash-advance fee

Question 9

What is a low APR card?

Answer 9

A credit card which offers low Apr long term. Offered to people with good credit history.

Question 10

What is a cash back card?

Answer 10

A credit card which gives cardholders back a % of all transactions made on a card as cash

Question 11

What does CVV stand for?

Answer 11

Card verification value

Question 12

Up to how much money does the consumer rights act protect?

Answer 12

£30,000

Question 13

What are the considerations when choosing a borrowing product?

Answer 13

The costs and risks of different borrowing methods, what they play to repay, what they can afford to repay, how long they need to borrow for

Question 14

What are the 3 different credit reference agencies?

Answer 14

Experian, equifax and transunion

Question 15

What is a CCJ?

Answer 15

County court judgement

Question 16

What are the main providers? (Banks)

Answer 16

Banks, building societies, credit unions, National saving + investment and post office

Question 17

Who are banks owned by?

Answer 17

Shareholders

Question 18

Who are credit unions and building society’s owned by?

Answer 18

It’s members

Question 19

Who owns NS+I and the post office owned by?

Answer 19

HM treasury

Question 20

What are the 5 big banks?

Answer 20

Barclays, standard chartered, Lloyds , HSBC and royal bank of scotland

Question 21

What are the main communication methods of banks?

Answer 21

Branches, online banking, post, mobile banking, telephone

Question 22

What are the key factors effecting costs of living?

Answer 22

Fuel costs, food cost and housing cost

Question 23

What are the 4 main types of insurance?

Answer 23

General insurance, health insurance, life insurance and pension policies

Question 24

What does 3rd party motor insurance cover?

Answer 24

Injuries to other people, damage to other peoples property, accidents caused by passengers and damage caused by caravan or trailer

Question 25

What’s an insurance premium?

Answer 25

The price of an insurance policy

Question 26

What are 2 factors insurance premiums are based on?

Answer 26

How likely the event is to occur and the length of time that the policy will be in force

Question 27

What’s an emergency fund?

Answer 27

Extra income used to make sure they have savings they can access instantly in an emergency

Question 28

What’s does the MAS recommend for an emergency fund?

Answer 28

Three months worth of mandatory and essential expenditure

Question 29

What is the PRA?

Answer 29

Prudential regulation authority

Question 30

What’s the FCA?

Answer 30

Financial conduct authority

Question 31

What’s the job of the PRA and FCA?

Answer 31

To set rules and regulate production

Question 32

What’s the financial ombudsman service?

Answer 32

A service which deals with complains about providers

Question 33

What’s the financial services compensation scheme?

Answer 33

A service which protects consumers if providers default. They protect up to £85,000

Question 34

What’s the CMA?

Answer 34

Competition markets authority

Question 35

What’s the job of the CMA

Answer 35

to regulate markets to make sure it works well for economy, businesses and consumers

Question 36

What is a budget?

Answer 36

A financial plan which states income and expenditure

Question 37

Income can be:

Answer 37

Earned or unearned

Question 38

What is two examples of unearned income

Answer 38

Benefits, pension

Question 39

Expenditure can be:

Answer 39

Mandatory,essential or discretionary

Question 40

A budget balance can be:

Answer 40

Zero, surplus and defectit

Question 41

What’s a zero budget?

Answer 41

Budget is balanced with all income assigned to be used on expenditure