Topic 6: Financial planning and informed choices

Question 1

Brand

Answer 1

Name of a provider and what signifies to the customer-such as security, trustworthiness and innovation

Question 2

Competitive demand

Answer 2

A situation where two or more products fulfil the same need/want and in competition with each other for the customer’s money.

Question 3

Dependant

Answer 3

People who are financially reliant on someone else

Question 4

Downsize

Answer 4

Redude size or number for financial reasons, often used to describe people’s decisions to move to a smaller home or a businesses decision to reduce its staff

Question 5

Independent Financial Advisor (IFA)

Answer 5

A professional who makes financial recommendations to clients, based on products offered by a wide range of providers

Question 6

Instant access account

Answer 6

Account from which the holder can withdraw their money at any time without losing any interest

Question 7

Joint demand

Answer 7

Situations in which the purchase of one product requires the purchase of another.

Question 8

Life event

Answer 8

An event in the life cycle that people expect or aspire to.

Question 9

Mortgage life assurance

Answer 9

A policy that covers payments of a mortgage debt in the event of death, known as mortgage life insurance

Question 10

Mortgage payment protection insurance

Answer 10

An insurance policy intended to cover mortgage payments in the event of illness or unemployment

Question 11

Product differentiation

Answer 11

Methods providers use to make one product different and more attractive than others that are similar

Question 12

Recession

Answer 12

A period of 6 months at least when the amount of goods/services a country produces is shrinking

Question 13

Redundancy

Answer 13

Losing a job because the business no longer needs, wants or can afford that job to be done. It’s related to the needs of the business and how well/badly an individual does their job.

Question 14

Risk profile

Answer 14

An assessment of a person’s capacity for risk, depends on personality, finances and their stage in the life cycle

Question 15

Stocks and shares (equities too)

Answer 15

Words to describe an investment that gives the holder part ownership of a company. If the value of the company increases, so does the value of the share but, if the value falls so does the investment. They’re brought/sold on stock exchanges

Question 16

Variable-rate mortgage

Answer 16

A mortgage loan whereby the borrower pays whatever the provider’s basic mortgage rate is at the time, known as the standard variable rate (SVR)