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Finance Diploma > topic 3 > Flashcards

topic 3 Flashcards

1
Q

Automatic credit
transfer

A

The method by which state benefits are paid directly into a bank
account.

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2
Q

Automation

A

Where a computer takes over a task previously carried out by a
person.

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3
Q

Bank rate

A

The interest rate that the Bank of England uses when it lends money
to other banks. Financial services providers take account of the Bank
rate when they decide how to set interest rates on their own
products.

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4
Q

Basic bank account

A

A current account that allows people to store their money as an
electronic balance and make payments by direct debit, standing
order, prepaid cash card or by withdrawing cash. There is no debit
card, cheque book or overdraft facility on this type of account.

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5
Q

Cash in hand

A

Being paid in cash, rather than money being paid directly into a
person’s bank account

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6
Q

Competition and
Markets Authority
(CMA)

A

The body responsible for strengthening business competition and
preventing and reducing anti-competitive activities.

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7
Q

Consumer culture

A

Where the buying and selling of goods and services is the most
important social and economic activity

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8
Q

Consumer demand

A

The amount individuals are spending on the goods and services they
are consuming, funded by their incomes, savings and borrowings.

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9
Q

Consumer Protection
from Unfair Trading
Regulations 2008

A

Legislation that aims to prevent businesses from misleading
consumers about the goods and services they are offering and from
using aggressive sales techniques to pressure people into buying
from them

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10
Q

Contingency plan

A

A plan to deal with unexpected changes in income or expenditure

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11
Q

Corporate demand

A

The amount businesses are spending on the goods and services they
are consuming, funded by their revenue, savings, borrowings and
capital injections from investors.

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12
Q

Credit crunch

A

A reduction in the availability of loans or a tightening of the
conditions needed to obtain one. The global financial crisis of
2007–08 began when financial institutions became reluctant to lend
funds to one another.

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13
Q

Demographic

A

Statistical data relating to population, eg in terms of age, sex,
ethnicity, culture, social status and geography

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14
Q

Deposit

A

The lump sum required by a mortgage lender as down payment.

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15
Q

Devaluation

A

A deliberate reduction in the value of a currency in relation to other
currencies, carried out as part of a government’s economic policy.

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16
Q

Digital divide

A

Economic inequality caused by a lack of access to, use of, or
knowledge of internet technology

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17
Q

Economic growth

A

The increase in the market value of the goods and services produced
by an economy over time.

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18
Q

Equity loan

A

A loan secured on a mortgaged property

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19
Q

EU Directive

A

A legislative act of the European Union, which requires member
states to achieve a particular result without dictating the means of
achieving that result

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20
Q

EU regulation

A

A legislative act of the European Union that becomes immediately
enforceable as law in all member states simultaneously

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21
Q

European Union

A

An economic and political union of 27 member states that the UK
formally left on 31 January 2020

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22
Q

Exports

A

Goods and services produced in one country and sold to another.

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23
Q

Exchange rate

A

The price of one currency in terms of another; eg it enables people
to calculate how many US dollars can be purchased with one pound
sterling

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24
Q

External factors

A

Factors over which individuals have little or no control, such as
interest rates and inflation

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25
Financial Conduct Authority (FCA)
The organisation that regulates financial firms providing services to consumers, and maintains the integrity of the UK’s financial markets
26
Financial exclusion
The inability to get access to even the most basic financial services products and services
27
Financial inclusion
The delivery of financial services at affordable cost to disadvantaged segments of society
28
Financial literacy
An individual’s level of knowledge and understanding of financial matters.
29
Financial Ombudsman Service (FOS)
An independent body set up by Parliament that settles customer complaints about providers at no charge to consumers
30
Financial Policy Committee (FPC)
A part of the Bank of England that monitors and responds to risk posed to the entire financial services market. Its focus on the whole market makes it a macro-prudential authority.
31
Financial regulation
The rules that govern how financial services providers operate and deal with their customers
32
Financial Services Act 2012
A key Act of Parliament governing the regulation of the financial services industry
33
Financial Services Compensation Scheme (FSCS)
A compensation scheme that pays compensation to account holders of up to a certain amount per provider if the provider goes into default (so cannot pay account holders the money in their accounts).
34
Fiscal policy
How the government manages the amount of money it raises in taxation, the amount it borrows on the financial markets, and the overall amount it spends.
35
Floating exchange rate
Where the value of a currency is determined by the supply of and demand for that currency
36
General Data Protection Regulation
European Union legislation implemented on 25 May 2018. In the UK, its provisions supersede those of the Data Protection Act 1998 with the creation of the Data Protection Act 2018
37
Globalisation
The integration of economies, industries, markets, cultures and policy-making around the world
38
Green technology
Processes and products that are renewable, sustainable or non-polluting, such as energy from tidal power.
39
Grey culture
The older section of the population
40
Housing market
The buying and selling of residential property
41
Inflation
A rise in prices, which means that the purchasing power of money falls.
42
Information failure
A situation in which consumers are not fully informed about a product
43
interest rates
The amount, expressed as a percentage, that a financial services provider charges a borrower when it lends money, or pays to a saver.
44
Migration
The movement of people from one location to another
45
Mis-selling
When an individual or provider is negligent or reckless in selling a product to an unsuitable customer, or in misrepresenting the contract
46
Monetary policy
The manipulation of interest rates to maintain low inflation
47
Monetary Policy Committee (MPC)
The Bank of England committee responsible for keeping inflation under control by the manipulation of interest rates.
48
Multiculturalism
Taking account of the different cultural needs and expectations of the various ethnic groups that make up society.
49
Negative equity
The situation where a mortgage loan is bigger than the value of the property.
50
Owner-occupiers
Those who own their own property outright or have a mortgage on it.
51
Pandemic
Where an infectious disease spreads rapidly to many people across a large region.
52
Payment protection insurance (PPI)
An insurance product intended to ensure repayment of loans should a borrower face unexpected events that prevent them from repaying the debt.
53
PESTEL analysis
A tool used to analyse how six key areas (Political, Economic, Social, Technological, Environmental and Legal) in the external environment might affect individual and corporate financial decisions
54
Prudential Regulation Authority (PRA)
One of the two main regulators of financial services in the UK (the other is the Financial Conduct Authority).
55
Social inclusion
Ensuring all individuals and groups in society have access to certain rights, such as employment, adequate housing, healthcare, education and training
56
Sub-prime market
Lending to and borrowing by consumers with untested or poor credit histories
57
Sustainability
Meeting the needs of society in ways which can continue indefinitely into the future without damaging or depleting natural resources
58
Trading Standards
An organisation that will investigate individual cases of bad practice on behalf of consumers and take steps to resolve the problem
59
Youth culture
The term used to describe the values, attitudes and interests shared by people in their teens and early 20s
60
'PESTEL analysis is used to consider how six key areas in the external environment might affect individual and corporate:
financial decisions
61
The Competition and Markets Authority has powers and responsibilities for general consumer protection across:
across all industries and businesses
62
A key objective in ensuring that all individuals have access to the benefits provided by financial products and services is social
inclusion
63
Economists use the term 'information failure' to describe a situation where
consumers are not fully informed about a product
64
What prompted the Monetary Policy Committee to reduce Bank rate to 0.25% in August 2016?
The Brexit referendum result
65
An equity loan is most likely to financially benefit a borrower who uses the funds to:
make home improvements
66
The relationship between interest rates and share prices can be correctly described as:
when interest rates rise, share prices tend to fall
67
At times of high unemployment people's financial planning priority tends to be:
protection planning
68
A rise in the value of sterling means that:
the cost of buying goods and services from other countries falls
69
Which body is currently responsible for conducting market studies and investigations where there may be competition and consumer problems?
The Competition and Markets Authority (CMA)
70
Demographics is the term used to describe the analysis of a population in terms of age, sex, ethnicity, culture, social status and geography. TRUE OR FALSE
True
71
The processes that lend themselves to automation are those that need judgement or discretion. TRUE OR FALSE
FALSE

Finance Diploma (8 decks)

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