Finance Unit 2

• Emergency Fund? 


  money you set aside for unexpected expenses, e.g medical bills, home repairs or job loss. (separate from day- day cash)
• Where can you go for financial planning advice?

  ADVISORY SERVICES: CITIZENS ADVICE BUREAU (CAB)/MONEY ADVICE

  SERVICE, CHARITIES, FINANCIAL ADVISERS.

  FINANCIAL SERVICE PROVIDERS: BANKS, BUILDING SOCIETIES, INVESTMENT

  COMPANIES LIKE PENSION ADVISERS OR STOCKBROKERS.
• What is a Independent Financial Adviser?

  Independent financial advisers (IFAs) must recommend products and solutions from the whole of the market.
• Can Financial Advisers give restricted advice?

  Yes, some FAs give ‘restricted advice’, meaning that they can offer products from one company or a limited number of companies, rather than from the entire market.
• Define Dependant:

  child/ another person who is financially dependent on you.
• What is a flat pay structure?

  Income that remains relatively stable over time
• What does life expectancy refer to?

  The average number of years a person lives
• What defines a non-professional career?

  Hourly wages without specific training required
• What is a premium in insurance terms?

  A sum paid regularly for financial cover
• What does probability measure?

  The likelihood of an event happening
• How does insurance work?

  Regular payments for compensation on loss or damage
• What characterizes a professional career?

  Requires training and usually pays a salary
• What does redundancy mean in employment?

  The loss of a job from an organization
• What is meant by risk?

  A situation involving a threat or danger
• What does risk-averse mean?

  Prefers not to take risks
• Advisory Services are..:

  Citizen Advice, Money Helper/ Advice, Step Change Debt charity. - provide high quality advice on how to plan for future debt situations.
• Independent Financial Advisers are..:

  unbiased advice about a range of financial products from different companies available.
• Financial Advisers as stock brokers:

  buy, sell stocks and other securities for retail clients
• Financial Advisers are..:

  Insurance Broker- helps you to decide what type of insurance and level of cover you need and recommend a suitable policy at a price you can afford.
• Define Credit Union..:

  a self co-operative whose members pool their savings to provide each other with credit at a low interest rate
• State In order the Risk Reward Spectrum: (Low to High)

  Deposits, Gifts& Bonds, Property, Shares, Overseas Shares, Specialist Investments.
• Define Gifts and Bonds.

  You can gift a savings bond to adults or children
• Define Uk Shares

   a share in, a definite portion of, a company's share capital. 
• Define Overseas Shares

  foreign stocks bought for global market access.
• Define Property:

  when someone is looking to secure finance against a residential or commercial property.
• Define Specialist investments-

  invest in high-growth potential businesses that may not be available through traditional investment channels.
• Define Bonds

  loaning your money to a government or company that needs to raise money.
• Define Shares:

  aka equity- a single unit of ownership in a company.
• When setting objectives/ goals what acronym is used to help?

  SMART-

  SPECIFIC

  MEASURABLE

  ACHIEVABLE

  REALISTIC

  TIMELY
• What's a Deposit Account?

  a bank account run by a financial institution where a customer can deposit/ withdraw money.
• What's a instant Account?

  a bank account where you can take out money when you need it, without having to pay to do so
• What's a Notice Account?

  allows to grow your savings with terms to suit your business needs. 
• What's a Bond?

  investment- you agree to lend your money to a government/ company at an agreed interest rate for a certain amount of time. 
• Whats a sharia compliant

  practice of adhering to Islamic law in business and financial transactions. 
• Whats an ISAs?

  Individual savings account where as your money grows you don't pay tax on the interest you earn.
• Define Compound interest

  the interest paid on interest. Interest calculated on both the principal and the interest rate.
• Define Simple Interest.

  interest calculated only on the principal cost. 

  an interest charge that borrowers pay lenders for a loan.
• Define a budget surplus.

  when income or revenue exceeds expenditures.
• Define what Online Banking, Telephone Banking, In bank branch and mail are.

  Online banking- statements on the bank

  app, transfer money via app.

  Telephone banking – automated

  statements, enquiry service.

  In bank branch- paper statements and

  enquiry service.

  Mail – paper statements sent to

  home/work.
• What does ATM stand for and what is it?

  An automated teller machine- an electronic banking outlet, allows customers to complete basic transactions without aid of a branch representative or teller.