Carina Storm
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Level 2 PERSONAL FINANCE (CeFF) Quiz on Specimen Paper C - Unit 1 – Finance, the Individual and Society (FIS), created by Carina Storm on 02/12/2018.

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Specimen Paper C - Unit 1 – Finance, the Individual and Society (FIS)

Question 1 of 35

1

Who out of the following would not be a UK citizen?

Select one of the following:

  • Daniel, born in England to English parents

  • Dorota, born in Poland and moved to England two years ago

  • Eve, born in New Zealand but has passed the 'life in the UK' test

  • Katie, born in Bermuda to Scottish parents

Explanation

Question 2 of 35

1

The government decides how much:

Select one of the following:

  • Benefit caps are

  • Electricity will cost

  • People should save

  • Private rents will cost

Explanation

Question 3 of 35

1

Banknotes must not be:

Select one of the following:

  • Easily counterfeited

  • Easily recognised

  • Hard-wearing

  • Portable

Explanation

Question 4 of 35

1

Gross pay is:

Select one of the following:

  • Pay after tax.

  • Pay before tax

  • Pay before tax and National Insurance

  • Pay after tax and National Insurance

Explanation

Question 5 of 35

1

Taxes are:

Select one of the following:

  • Compulsory payments

  • Contributory payments

  • Optional payments

  • Voluntary payments

Explanation

Question 6 of 35

1

Income tax is an example of a tax which is:

Select one of the following:

  • Direct and flat rate

  • Direct and variable rate

  • Indirect and flat rate

  • Indirect and variable rate

Explanation

Question 7 of 35

1

An increase in which of the following taxes would impact on the price paid for a new car?

Select one of the following:

  • Capital gains tax

  • Corporation tax

  • Fuel duty

  • Value added tax

Explanation

Question 8 of 35

1

Charities benefit the economy mainly because they:

Select one of the following:

  • Have volunteers

  • Help companies with CSR

  • Reduce social justice

  • Reduce the need for public spending

Explanation

Question 9 of 35

1

Reading and understanding the small print is one aspect of:

Select one of the following:

  • Choosing financial products wisely

  • Keeping track of personal finances

  • Planning ahead

  • Staying within a budget

Explanation

Question 10 of 35

1

Adults who do not adequately save for retirement may become dependent on:

Select one of the following:

  • Government benefits

  • Income tax

  • National Insurance

  • Premium Bonds

Explanation

Question 11 of 35

1

Inflation measures the increase in:

Select one of the following:

  • Exchange rates

  • Interest rates.

  • The prices of goods and services

  • The rates of taxation

Explanation

Question 12 of 35

1

If the savings rate is 4% and the inflation rate 2%, by how much will money grow in real terms?

Select one of the following:

  • 0%

  • 2%

  • 4%

  • 6%

Explanation

Question 13 of 35

1

The interest charged on overdrafts is known as the:

Select one of the following:

  • AER

  • APR

  • EAR

  • ISA

Explanation

Question 14 of 35

1

Interest rewards:

Select one of the following:

  • Borrowers

  • Employees

  • Employers

  • Savers

Explanation

Question 15 of 35

1

If a customer receives a real return of 5% and inflation is running at 3%, what nominal return have they received?

Select one of the following:

  • 2%

  • 3%

  • 5%

  • 8%

Explanation

Question 16 of 35

1

Which of the following has the government put forward as a potential solution to the issue of funding the retirements of an ageing population?

Select one of the following:

  • Increasing the retirement age

  • Lower levels of immigration

  • Lower taxes

  • Reducing the retirement age

Explanation

Question 17 of 35

1

If the exchange rate is 1 GBP = 1.21 euros, how many euros can you get for £150?

Select one of the following:

  • 80.70

  • 123.97

  • 150.00

  • 181.50

Explanation

Question 18 of 35

1

If the pound sterling has been weakening against the dollar, then when Kim visits New York next week she will:

Select one of the following:

  • Find it harder to find a company willing to exchange her pounds for dollars

  • Get fewer dollars for her pound sterling

  • Get more dollars for her pound sterling

  • Get the same number of dollars for her pound sterling

Explanation

Question 19 of 35

1

A 12-year-old will generally be most interested in the:

Select one of the following:

  • Cost of their mobile phone contract

  • Interest rate on their savings

  • Minimum wage for apprentices

  • Money they might get on their birthday

Explanation

Question 20 of 35

1

Someone in retirement is less likely to take financial risks than a young adult because they:

Select one of the following:

  • Have fewer options to earn back any losses

  • Have greater outgoings than younger people

  • Have more financial responsibilities than younger people

  • Tend to have more debt than younger people

Explanation

Question 21 of 35

1

Case Study 1
Nic is aged 16 and has just started working towards his A levels. His favourite subject is business studies; in this week’s lessons he has been learning about the different types of economies that exist in the world today. He takes good care of the money he receives and is currently saving up for driving lessons so that he can start taking them as soon as he turns 17.
Nic earns £30 a week from a part-time weekend job washing dishes in a local café. His parents give him an allowance of £40 a month. He recently inherited £500 after the death of his aunt, and he has a £20 note left over from the money he received for his birthday.

Question:
The £20 note Nic received was manufactured by:

Select one of the following:

  • Bitcoin

  • De La Rue

  • The Bank of England

  • The Royal Mint

Explanation

Question 22 of 35

1

Case Study 1
Nic is aged 16 and has just started working towards his A levels. His favourite subject is business studies; in this week’s lessons he has been learning about the different types of economies that exist in the world today. He takes good care of the money he receives and is currently saving up for driving lessons so that he can start taking them as soon as he turns 17.
Nic earns £30 a week from a part-time weekend job washing dishes in a local café. His parents give him an allowance of £40 a month. He recently inherited £500 after the death of his aunt, and he has a £20 note left over from the money he received for his birthday.

Question:
Which of the following is a source of earned income for Nic? His:

Select one of the following:

  • Allowance

  • Birthday present

  • Inheritance

  • Part-time wages

Explanation

Question 23 of 35

1

Case Study 1
Nic is aged 16 and has just started working towards his A levels. His favourite subject is business studies; in this week’s lessons he has been learning about the different types of economies that exist in the world today. He takes good care of the money he receives and is currently saving up for driving lessons so that he can start taking them as soon as he turns 17.
Nic earns £30 a week from a part-time weekend job washing dishes in a local café. His parents give him an allowance of £40 a month. He recently inherited £500 after the death of his aunt, and he has a £20 note left over from the money he received for his birthday.

Question:
During Nic's business studies course he has learned that the UK is a:

Select one of the following:

  • Command economy

  • Communist economy

  • Free market economy

  • Mixed economy

Explanation

Question 24 of 35

1

Case Study 2
Saira earns £250,000 working for a very profitable private firm of bankers. She has three children. Her son Bryn, aged 20, who works in a second-hand bookshop, has just been given his first car. The other children both attend private school and the fees total £30,000 a year.
Saira has a large mortgage and spends a great deal each month to maintain the lifestyle she and her children have come to enjoy. She is concerned that high earners will be asked to pay more tax if there is a change of government at the next election and that this will impact on her ability to afford her lifestyle.

Question:
What tax does Saira's employer pay on the profits it makes?

Select one of the following:

  • Capital gains tax

  • Corporation tax

  • Income tax

  • Inheritance tax

Explanation

Question 25 of 35

1

Case Study 2
Saira earns £250,000 working for a very profitable private firm of bankers. She has three children. Her son Bryn, aged 20, who works in a second-hand bookshop, has just been given his first car. The other children both attend private school and the fees total £30,000 a year.
Saira has a large mortgage and spends a great deal each month to maintain the lifestyle she and her children have come to enjoy. She is concerned that high earners will be asked to pay more tax if there is a change of government at the next election and that this will impact on her ability to afford her lifestyle.

Question:
What tax will Bryn have to start paying now he is a car owner?

Select one of the following:

  • Capital gains tax

  • Corporation tax

  • Road tax

  • Value added tax

Explanation

Question 26 of 35

1

Case Study 2
Saira earns £250,000 working for a very profitable private firm of bankers. She has three children. Her son Bryn, aged 20, who works in a second-hand bookshop, has just been given his first car. The other children both attend private school and the fees total £30,000 a year.
Saira has a large mortgage and spends a great deal each month to maintain the lifestyle she and her children have come to enjoy. She is concerned that high earners will be asked to pay more tax if there is a change of government at the next election and that this will impact on her ability to afford her lifestyle.

Question:
Which of the following changes in tax bands would Saira be most concerned about?

Select one of the following:

  • Additional rate

  • Basic rate

  • Higher rate

  • Personal allowance

Explanation

Question 27 of 35

1

Case Study 3
Dillon has just started his first year at university. He is studying politics at Swansea. Dillon has been brought up to be careful with his money.
Because his parents are low earners, Dillon receives a maintenance grant worth around £5,000 a year. He feels that these measures made it possible for him to attend university, and he is the first in his family to do so. He wants to make his parents proud and so is currently working hard on his first assignment, which is to research the history of democratic rule.

Question:
As Dillon finds out in his research, democratic rule means rule by the:

Select one of the following:

  • Government

  • Parliament

  • People

  • Queen

Explanation

Question 28 of 35

1

Case Study 3
Dillon has just started his first year at university. He is studying politics at Swansea. Dillon has been brought up to be careful with his money.
Because his parents are low earners, Dillon receives a maintenance grant worth around £5,000 a year. He feels that these measures made it possible for him to attend university, and he is the first in his family to do so. He wants to make his parents proud and so is currently working hard on his first assignment, which is to research the history of democratic rule.

Question:
Dillon also learns that Wales is responsible for setting its own policies in which of the following areas?

Select one of the following:

  • Benefits

  • Education

  • Employment

  • Tax

Explanation

Question 29 of 35

1

Case Study 3
Dillon has just started his first year at university. He is studying politics at Swansea. Dillon has been brought up to be careful with his money.
Because his parents are low earners, Dillon receives a maintenance grant worth around £5,000 a year. He feels that these measures made it possible for him to attend university, and he is the first in his family to do so. He wants to make his parents proud and so is currently working hard on his first assignment, which is to research the history of democratic rule.

Question:
The decisions Dillon makes about his finances are most influenced by:

Select one of the following:

  • His family

  • His student friends

  • The Government

  • The media

Explanation

Question 30 of 35

1

Case Study 4
Dean has a variable rate mortgage. Although he has managed to keep up with his monthly repayments, he is concerned about how he will manage this if interest rates rise in the near future. In addition to his mortgage, Dean has a fixed-rate personal loan and an outstanding balance on his credit card and store card. He is managing to keep up his repayments, but this leaves him with no money left over at the end of the month to set aside for emergencies or to meet any other financial needs.

Question:
Because of Dean's high levels of debt he has less money for his wants and needs. This is due to him having less:

Select one of the following:

  • Disposable Income

  • Gross Income

  • Net Income

  • Taxable Income

Explanation

Question 31 of 35

1

Case Study 4
Dean has a variable rate mortgage. Although he has managed to keep up with his monthly repayments, he is concerned about how he will manage this if interest rates rise in the near future. In addition to his mortgage, Dean has a fixed-rate personal loan and an outstanding balance on his credit card and store card. He is managing to keep up his repayments, but this leaves him with no money left over at the end of the month to set aside for emergencies or to meet any other financial needs.

Question:
Which one of Dean's borrowing products will not become more expensive in the event of an interest rate rise? His:

Select one of the following:

  • Credit card

  • Mortgage

  • Personal Loan

  • Store card

Explanation

Question 32 of 35

1

Case Study 4
Dean has a variable rate mortgage. Although he has managed to keep up with his monthly repayments, he is concerned about how he will manage this if interest rates rise in the near future. In addition to his mortgage, Dean has a fixed-rate personal loan and an outstanding balance on his credit card and store card. He is managing to keep up his repayments, but this leaves him with no money left over at the end of the month to set aside for emergencies or to meet any other financial needs.

Question:
Which of the following facts about inflation is true for Dean?

Select one of the following:

  • Changes in the rate of inflation will increase his monthly repayments

  • Changes in the rate of inflation will reduce his monthly repayments

  • High inflation increases the value of his debts in real terms

  • High inflation reduces the value of his debts in real terms

Explanation

Question 33 of 35

1

Case Study 5
Devlin has been employed in the ‘third sector’ for five years now, travelling up and down the UK training volunteers to fundraise. He has done so well that he has won the organisation’s top prize at its annual awards ceremony. The prize is a return flight to the Indian capital of New Delhi to see how the funds raised by the organisation are put to use. Devlin has to pay for the rest of his expenses and, as he already has very little in the way of disposable income, he has chosen to stay in the only hotel he could afford from the recommended list.

Question:
Devlin describes himself as working in the 'third sector'. This means that he is working for a:

Select one of the following:

  • Charity

  • Nationalised Industry

  • Private company

  • Public company

Explanation

Question 34 of 35

1

Case Study 5
Devlin has been employed in the ‘third sector’ for five years now, travelling up and down the UK training volunteers to fundraise. He has done so well that he has won the organisation’s top prize at its annual awards ceremony. The prize is a return flight to the Indian capital of New Delhi to see how the funds raised by the organisation are put to use. Devlin has to pay for the rest of his expenses and, as he already has very little in the way of disposable income, he has chosen to stay in the only hotel he could afford from the recommended list.

Question:
Devlin's choice of hotel is an example of him:

Select one of the following:

  • Choosing a want over a need

  • Keeping track of personal finance

  • Planning ahead

  • Staying within a budget

Explanation

Question 35 of 35

1

Case Study 5
Devlin has been employed in the ‘third sector’ for five years now, travelling up and down the UK training volunteers to fundraise. He has done so well that he has won the organisation’s top prize at its annual awards ceremony. The prize is a return flight to the Indian capital of New Delhi to see how the funds raised by the organisation are put to use. Devlin has to pay for the rest of his expenses and, as he already has very little in the way of disposable income, he has chosen to stay in the only hotel he could afford from the recommended list.

Question:
If the pound sterling strengthens against the Indian rupee then:

Select one of the following:

  • Devlin will be able to buy fewer rupees for his pound sterling

  • Devlin will be able to buy more rupees for his pound sterling

  • Fewer people will buy imports from India

  • The funds raised will go further when converted into rupees

Explanation

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