Unit 2: Financial Capability for the Medium and Long Term - Topic 2

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Someone who wishes to invest rather than save is probably looking for:
Investment products are higher-risk, giving them the potential for a higher return over the long term.
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In terms of investment returns, wanting your investment to pay you a regular amount that you can use for living expenses probably means that you are looking for:
Having an investment objective of 'income', suggests that you looking for a regular amount of money to help fund your way of life.
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A portfolio manager’s 'portfolio’ is:
Portfolio managers look after a portfolio of various types of financial products eg shares, bonds etc on behalf of customers who have a sizeable sum to invest.
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Capital growth is achieved when the value of an investment is greater when it is sold, than the value paid for it.
This statement is true. Capital growth is about increasing the amount of your initial investment.
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Pete wants to put his savings into a product that is as safe as possible. Which one of the following is his best option?
NS&I products are seen as being very low risk because they are backed by the UK Government.
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If you own shares, you:
A share is a part-ownership in a company. For example, if someone bought shares in Barclays Bank plc, they would become a part-owner of the bank, along with all the other shareholders.
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In any one investment, an investor can either aim for capital growth or income, but not both.
This statement is false. Many investments can provide a mixture of both growth and income.
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The main risk for investors who buy a company’s shares is that:
Whilst it is almost always possible for someone to sell their shares if they need their cash back, there is a risk that they may be selling when the share values have fallen.
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A gilt is a loan to:
Gilts are the name given to bonds issued by the UK government.
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Retail investors may benefit from unit trusts because of their:
Their risk is reduced because the fund invests in a large number of different types of company. The impact of any one of them falling in value would be less severe than if the investor were to own only one type of investment.
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Pensions are mainly set up to let people:
A pension is a long-term savings plan which is tax-efficient and is purchased by an individual throughout their working life in order to save for their retirement.
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On the whole, investment products are less risky than savings products.
This statement is false. On the whole, investment products are more risky than savings products.
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Historically, if you had a personal pension, when you reached retirement, part of your pension pot was likely to be used to buy:
At retirement, many people chose to use part of their pension pot to buy an annuity which provided them with an income for life.
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Other cards in this set

Card 2

Front

In terms of investment returns, wanting your investment to pay you a regular amount that you can use for living expenses probably means that you are looking for:

Back

Having an investment objective of 'income', suggests that you looking for a regular amount of money to help fund your way of life.

Card 3

Front

A portfolio manager’s 'portfolio’ is:

Back

Preview of the front of card 3

Card 4

Front

Capital growth is achieved when the value of an investment is greater when it is sold, than the value paid for it.

Back

Preview of the front of card 4

Card 5

Front

Pete wants to put his savings into a product that is as safe as possible. Which one of the following is his best option?

Back

Preview of the front of card 5
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