The government's annual Budget is:

Forecast of the income from taxation and the expected spending in that time

The first step in drawing up a new financial plan is to:

List everything someone is likely to spend money on

Mandatory expenditure:

Covers payments that you have a legal obligation to pay

In relation to the amount of money spent on small purchases people tend to:

Underestimate the amount they spend

Sustainable personal finance is about:

Maintaining a balance between income and expenditure to satisfy NWAs

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LIBF Unit 3 Topic 1

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Questions 13

Answers

1
The government's annual Budget is:
A forecast of the economic growth it expects to see in the future.
A forecast of the interest rates it expects to see in the future.
A forecast of the income from taxation only.
Forecast of the income from taxation and the expected spending in that time
2
The main providers of current accounts are:
Bank of England
the government
credit unions
banks and building societies
3
An investment trust is an example of a collective investment scheme.
False
True
4
Failing to make contingency plans for unexpected changes in circumstances can lead to unsustainable personal finances.
False
True
5
Which of the following lending products will charge the highest interest rate?
A payday loan
A mortgage
A personal loan
A credit card
6
The first step in drawing up a new financial plan is to:
Grew their requirements into needs, wants and aspirations
Consult a financial advisor
Categorise expenditure as either mandatory, essential or discretionary
List everything someone is likely to spend money on
7
Mandatory expenditure:
Covers payments that you have a legal obligation to pay
Covers payments that fulfil a want for aspiration
Covers payments for things such as holidays and entertainment
Covers payments that have to be paid to meet basic needs
8
In relation to the amount of money spent on small purchases people tend to:
Forget that they spend money at all
Overestimate the amount they spend
Accurately estimate the amount they spend
Underestimate the amount they spend
9
Planning for unforeseen events is known as:
contingency planning
break-even planning
flexible planning
cash flow planning
10
Which of the following is a type of low-cost personal pension plan?
NEST
A piggy bank
A stakeholder pension plan
An occupational pension plan
11
Cash-flow modelling software programmes are used for short-term, relatively straightforward scenarios.
False
True
12
Sustainable personal finance is about:
Short, medium and long-term plans detailing expected income and expenditure
Only using companies that are ethical in their approach to business.
Making your money last longer through borrowing.
Maintaining a balance between income and expenditure to satisfy NWAs
13
Long-term financial planning would take into account funding for:
Children going to University
Monthly bills
Next year's holiday
Having a good weekend

LIBF Unit 3 Topic 1 Flashcards | StudBud