Business btec Unit 3 Comprehensive Exam Questions With 100% Correct Verified Answers.

unit of account - correct answer places value on goods and services Means of exchange - correct answer Allows us to trade Legal tender - correct answer It is a legally recognised form of payment Store value - correct answer Allows us to use in the future as it keeps its value Personal attitudes - correct answer different people are more or less likely to take risks, depending on the reward and how you've been brought up Life stages - correct answer As you grow up from childhood to adulthood, your financial needs change, each stage of your life has different implication that will affect not just your needs but also your attitude to money. Culture - correct answer Different cultures are affected by tradition, religion + ethical belief have different attitudes to money Life events - correct answer Events throughout your life impact your attitude to money, these can be in or out of your control External influences - correct answer Factors outside your control (economy) have an impact, these effect your ability to spend and save Interest rates - correct answer Low = borrow High = Save Remaining solvent - correct answer Meet day to day expenditure + repay debts, set financial goals + save Cash A+D - correct answer A- most widely accepted form of exchange D- can be lost or stolen Debit card A+D - correct answer A- no need to carry cash D-not suitbale for small transactions Debit card - correct answer Issued by banks for payments for goods and services deducted from a current account Credit card - correct answer Issued by financial institutions allowing customers to delay payments for good and services Credit card A+D - correct answer A- suitable for online transactions D- can encourage over spending leading to debt Cheque - correct answer Written order to the bank to make a payment for a specific amount of monet taken from one persons account to another Cheque A+D - correct answer A- low risk D- can make errors, viewed as old fashioned Electronic transfer - correct answer Payment is transferred directly from one bank account to another Electronic transfer A+D - correct answer A- proivdes record of payment D- risk of loss is incorrectly set up Standing order - correct answer Aggreement made with the bank to transfer a fixed sum of money to a 3rd party account on a set date on a regular basis Standing order A+D - correct answer A- same amount each time making it easy to budget D- payment is taken regardless of balance = lead to use of an overdraft facility Pre- paid card - correct answer Money uploaded onto a card Pre- paid card - correct answer A- can set budget in advance to avoid overspending D- no protection Contactless card - correct answer Card with a feature that allows money to be transferred when it touches a contactless terminal Contactless A+D - correct answer A- gaining popularity, convinient D- only accepted for small transactions Charge card - correct answer Issued by financial institutions allowing customers to delay payments for goods and services for a short period of time; the balance must be paid off in full when a statement is issued Charge card A+D - correct answer A- allows short period of credit D- must be paid in full each month Store card - correct answer Issued by a retial outlet so customers can delay payments for good and services but for one store specifically Store card A-D - correct answer A- often offer loyalty schemes D- can encourage overspending Mobile banking - correct answer Ability to carry out financial transactions using a mobile device Mobile banking A+D - correct answer A- convenient D- doesn't offer all the features of online banking Bankers Automated Payment Scheme CHAPS - correct answer System which allows the transfer of payment directly from one bank account to another CHAPS A+D - correct answer A- fast payment guaranteed within 2 hours D- limit set on amount transferred Standard current account - correct answer Noramal account offered to people with normal credit rating, standard features Packaged premium current account - correct answer Additional features (car, house insurance, credit card protection), additional charges Basic current account - correct answer Limited features designed for people with poor credit rating, no overdraft, no interest on positive balances Student current account - correct answer Designed to meet the needs of learners, aggreed overdraft and incentives of join the bank Standard A+D - correct answer A- wide range of features D- no additonal perks Packaged premium A+D - correct answer A- additonal perks D- additonal monthly charge, may not be value for money Basic A+D - correct answer A- available for customers with low credit rating D- Limited features, no overdraft Student A+D - correct answer A- bonuses offered are designed to meet the needs of learners D- overdraft could encourage overspending Overdraft - correct answer Allows you to withdraw money you don't have from a current account Personal loan - correct answer Ability to borrow a set amount of money to be repaid in regular instalments with interest Hire purchase - correct answer Allows you to have use of an item immediately but pay for it in regular instalments, item remains property of the seeler untill all instalments have been made Mortgage - correct answer Long term loan, secured against an asset (house), suitbale for assets that maintain value for a long time Payday loan - correct answer Short term source of finance to bridge gap between receiving wage, small amounts at high rates, emergency Persoanl loan A+D - correct answer A- pre agreed making planning and budgeting easier D- may have to be secured against an asset Mortgage A+D - correct answer A- allows customer to spread the cost of an expensive items over a long period of time D- faliure to meet repayments could lead to the loss of a home and affect credit rating Credit cards A+D - correct answer A- holder can pay above the minimum rate to speed up repayments D- can encourage overspending Payday Loan A+D - correct answer A- help solve immediate short term cash flow problems D- interest rates very high, lead to debt ISA Individual Savings Account - correct answer savings account where interest is not charged on interest received Deposit + Savings account - correct answer Account where interest is paid on the balance and normally the holder needs to give notice before with drawals