financial studies topic 7- unit 2

what is an example of a non flexible savings product?
fixed term bonds
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what are 2 examples of non flexible investment products?
life insurance and personal pension funds
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what are two examples of non flexible loans?
hire purchase and fixed interest mortgages
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what is a partnership?
a legal form of business operation between 2 or more individuals who share management and profits
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what does it mean if a business is nearly insolvent?
if it's at a position where the value of its assets are less than the value of its total liabilities
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how can "what if" calculations improve the budgeting process?
"what if" is a function on a spreadsheet whereby the user can set out a table of calculations and then change one or more the variable to see "what" would happen to the final results "if" certain changes happen
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how could a rise in interest rates affect a person with a variable rate mortgage?
an increase in interest rates is a problem for osmeone repaying a loan with a variable rate of interest because their repayments will increase
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what is inflation and how does it affect financial planning?
the rate of inflation is the speed at which prices rise. if people's income rises more slowly than prices, they suffer a decrease in their standard of living
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what is exchange rate and how does it affect financial planning?
exchange rate of a currency is its price in terms of other currencies. if someone's financial plan includes an annual foreign holiday then it's wise to increase the cost by a small % each year to reflect adverse exchange rate movements
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what are benefits/social security and how do they affect financial planning?
some people rely on benefits for their income, the amount they're entitled to depends on the government in power. this makes long term planning difficult because people don't know what will happen to benefit rates or entitlement in the future
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what is universal credit?
it is a social security benefit in the UK introuduced in 2013 to replace 6 means tested benefits and tax credits
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what is personal independence payment?
PIP replaced DLA for people aged 16-64. it requires people to be assessed to see how much financial support they need. it's designed to help people with long term ill health or disability to pay for the extra costs of their condition
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what is the role of citizen's advice?
a network of 316 independent charities throughout the UK that give free, confidential informationa nd advice to assist people with money, legal, consumer and other problems
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what is equity withdrawal?
the additional borrowing based on the difference between the value of the house and the outstanding mortgage
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what are payday loans?
a relatively small amount of money lent at a high interst rate on the agreement that it will be repaid when the borrower recieves their next wages
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what are debt consolidation loans?
this means taking out a new loan to pay off a number of liabilities and consumer debts, generally unsecured ones. in effect multiple debts are combined into a single, larger piece of debt, usually with more favourable pay off terms
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what is credit history?
a record of a borrower's responsible repayment of debts. a credit report is a record of the borrower's credit history from a number of sources, including baqnks, credit card companies and governments
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what is a credit rating?
an estimate of the ability of a person or organisation to fulfil their financial commitments, based on previous dealings
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what is the role of a credit reference agency?
CRAs provide information to organisations to help them decide to lend you money or gives you goods and services on credit. without CRAs there would be a very long process and increase of the chance of decisions being made without full knowledge
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what is a financial footprint?
it is every financial transaction that has been performed by a customer which is noted on record
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what does a financial footprint involve?
how much someone' borrowed in the past and how often, whether their borrowing has increased over time, how many loan applications they've made and what the results of these were, to what extent they paid off their debts, whether they missed payments
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what is redundancy?
when an employer reduced their workforce because jobs are no longer needed
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what is downsizing?
a strategy used to reduce the size and scope of a business in order to improve its financial performance , usually by laying off employees or closing less profitable divisions
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Card 2


what are 2 examples of non flexible investment products?


life insurance and personal pension funds

Card 3


what are two examples of non flexible loans?


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Card 4


what is a partnership?


Preview of the front of card 4

Card 5


what does it mean if a business is nearly insolvent?


Preview of the front of card 5
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