Topic 6 - Financial Planning and Informed Decisions Flashcards Preview

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Flashcards in Topic 6 - Financial Planning and Informed Decisions Deck (6)
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1
Q

Where an individual stands on risk spectrum depends on…

A

Personality
Amount of money at their disposal
Stage of life cycle

2
Q

Self-insurance definition

A

Saving money incase of an event happening rather than going to an insurance company

3
Q

Why do people save and invest in the medium to long-term?

A

To spend money eventually on a particular item or life event

To provide for the future

4
Q

Joint demand definition

A

Two products are bought together because they are complementary e.g. personal loan to buy a car and motor insurance

5
Q

Competitive demand definition

A

Two products fulfil same need or want so are in competition for customer’s money - purchase of one excludes purchase of another.

6
Q

Inflation definition

A

Gradual increase in general level of prices in an economy over a period of time