Quiz
Specimen Paper B - Unit 2 - Practices of Managing Money (PMM)
Questions in this quiz (35)
1Where would be the best place to keep money for an emergency fund?
- AIn a long-term fixed deposit account
- BIn a safe place at home
- CIn an instant-access savings account
- DWith an adviser
2The best person to get impartial financial advice from would be:
- Aa building society adviser
- Ba friend or family member
- Ca solicitor
- Dan independent financial adviser
3Planning can be undertaken for the short, medium or long term. What period of time would be classified as 'medium term'?
- A1 to 12 months
- B1 to 5 years
- C7 to 15 years
- D10 to 20 years
4Which of the following is the most accurate definition of budgeting?
- ABorrowing money from the bank
- BChecking your bank statement regularly
- CEstimating money coming in and going out over a period of time
- DUsing online banking to track transactions
5Tom has a fixed-rate loan. If interest rates go up, what will be the immediate impact, if anything, on Tom's loan repayments? They will:
- Afall by the rate of inflation
- Bgo up
- Creduce, but rise over time
- Dremain unchanged
6A weakening in UK pound sterling would lead to:
- Aa boost in the UK's economy
- Bcheaper imports
- Cmore expensive exports
- Dreduced production in the UK
7In terms of the impact of personal spending on the economy, which of the following statements is true? Increased personal spending generally creates:
- Ahigher levels of unemployment
- Bincreased company profits
- Clower receipts for the government
- Dreduced personal income
8Where would you find a 'card security code'?
- AAlong the bottom of a cheque
- BIn the top right-hand corner of a cheque
- COn the back of a debit card
- DOn the front of a debit card
9What is someone looking for if they want to make sure they are getting the best goods for the cash they have available?
- AThe longest guarantees
- BThe lowest-priced deals
- CThe most expensive goods
- DValue for money
10When purchasing tickets online for a theatre show, what hidden charges might apply? The:
- Acost of a programme at the theatre
- Bdrinks during the interval at the show
- Cface value of the ticket
- Donline booking fee
11Which of the following is the easiest and most effective way to shop around?
- AReading the adverts in a local newspaper
- BSpending the afternoon in a large department store
- CUsing price-comparison websites
- DVisiting the town centre for the day
12Which of the following measures could a government take to help reduce personal spending?
- AA combination of raising taxes and cutting government spending
- BCutting government spending
- CNeither cutting government spending nor raising
- DRaising taxes
13An example of a 'good' debt is:
- Aa mortgage to buy a house
- Ba payday loan
- Cusing a credit card to pay for a holiday
- Dusing an overdraft to buy clothes for a night out
14When would an overdraft be useful?
- ATo buy a property
- BTo buy an expensive item such as a car
- CWhen extra money is needed for a short period of time
- DWhere extra money is required over a long period
15Which of the following can be issued to an individual who is unable to pay a debt to another individual or company?
- ACounty court judgment
- BDebt confirmation receipt
- CLegal repayment instruction
- DRepayment request notice
16Case Study 1
Viren has a full-time job with a bank in London. He has been studying part-time for a degree in accounting and finance, which he is confident will help him to achieve his career aspirations. He has a total annual gross salary of £31,000 which is paid directly by his employer at the end of each calendar month. His tax code is 1100L.
While he has enjoyed working for the bank and has learned a lot, he is keen to leave and broaden his experience. In addition, he would like to get more involved with helping small businesses to grow. He has therefore decided to leave the bank and become a self-employed business consultant. He has handed in his notice at work and will leave the bank in one month’s time.
Question:
In his current job at the bank, what class of National Insurance contributions would Viren make?- AClass 1
- BClass 2
- CClass 3
- DClass 4
17Case Study 1
Viren has a full-time job with a bank in London. He has been studying part-time for a degree in accounting and finance, which he is confident will help him to achieve his career aspirations. He has a total annual gross salary of £31,000 which is paid directly by his employer at the end of each calendar month. His tax code is 1100L.
While he has enjoyed working for the bank and has learned a lot, he is keen to leave and broaden his experience. In addition, he would like to get more involved with helping small businesses to grow. He has therefore decided to leave the bank and become a self-employed business consultant. He has handed in his notice at work and will leave the bank in one month’s time.
Question:
When Viren becomes self-employed, his tax year will run between which two dates?- A1 January one year to 31 December the same year
- B31 January one year to 30 January the next year
- C6 April one year to 5 April the next year
- D1 July one year to 30 June the next year
18Case Study 1
Viren has a full-time job with a bank in London. He has been studying part-time for a degree in accounting and finance, which he is confident will help him to achieve his career aspirations. He has a total annual gross salary of £31,000 which is paid directly by his employer at the end of each calendar month. His tax code is 1100L.
While he has enjoyed working for the bank and has learned a lot, he is keen to leave and broaden his experience. In addition, he would like to get more involved with helping small businesses to grow. He has therefore decided to leave the bank and become a self-employed business consultant. He has handed in his notice at work and will leave the bank in one month’s time.
Question:
When Viren leaves his current job he will receive a:- AP15
- BP45
- CP60
- DP90
19Case Study 1
Viren has a full-time job with a bank in London. He has been studying part-time for a degree in accounting and finance, which he is confident will help him to achieve his career aspirations. He has a total annual gross salary of £31,000 which is paid directly by his employer at the end of each calendar month. His tax code is 1100L.
While he has enjoyed working for the bank and has learned a lot, he is keen to leave and broaden his experience. In addition, he would like to get more involved with helping small businesses to grow. He has therefore decided to leave the bank and become a self-employed business consultant. He has handed in his notice at work and will leave the bank in one month’s time.
Question:
How much of Viren's current annual salary is subject to income tax?- A£15,000
- B£20,000
- C£25,000
- D£30,000
20Case Study 2
Christina and Derek need to buy a new car to commute each day. They have seen a car costing £9,000 but have yet to decide how to fund it. The choices available to them are:
Using their joint credit card (variable interest rate 18.9%), making minimum repayments each month.
Taking up the dealer’s offer of a fixed-rate personal loan at 9.9% over 5 years.
Borrowing the money, interest-free, from Derek’s parents.
Using their emergency fund.
Christina and Derek also have a mortgage, which has just come to the end of its fixed rate. The current variable rate is 4.69%. They are concerned about how future interest rate rises might impact on their mortgage payments and on any car loan payments they might have. In addition, Derek has an outstanding student loan and Christina has an outstanding balance on her store card, which she uses to buy clothes.
Question:
Which of the following represents the most costly way for Christina and Derek to buy their new car?- AThe dealer's loan
- BThe loan from Derek's parents
- CTheir existing savings
- DTheir joint credit card
21Case Study 2
Christina and Derek need to buy a new car to commute each day. They have seen a car costing £9,000 but have yet to decide how to fund it. The choices available to them are:
Using their joint credit card (variable interest rate 18.9%), making minimum repayments each month.
Taking up the dealer’s offer of a fixed-rate personal loan at 9.9% over 5 years.
Borrowing the money, interest-free, from Derek’s parents.
Using their emergency fund.
Christina and Derek also have a mortgage, which has just come to the end of its fixed rate. The current variable rate is 4.69%. They are concerned about how future interest rate rises might impact on their mortgage payments and on any car loan payments they might have. In addition, Derek has an outstanding student loan and Christina has an outstanding balance on her store card, which she uses to buy clothes.
Question:
If interest rates increase, what will be the impact on Christina and Derek's budget?- AA decrease in monthly mortgage repayments and therefore more spending money
- BAn increase in monthly mortgage repayments and therefore an increase in spending money
- CAn increase in monthly mortgage repayments and therefore less spending money
- DNo impact on monthly mortgage repayments or spending money
22Case Study 2
Christina and Derek need to buy a new car to commute each day. They have seen a car costing £9,000 but have yet to decide how to fund it. The choices available to them are:
Using their joint credit card (variable interest rate 18.9%), making minimum repayments each month.
Taking up the dealer’s offer of a fixed-rate personal loan at 9.9% over 5 years.
Borrowing the money, interest-free, from Derek’s parents.
Using their emergency fund.
Christina and Derek also have a mortgage, which has just come to the end of its fixed rate. The current variable rate is 4.69%. They are concerned about how future interest rate rises might impact on their mortgage payments and on any car loan payments they might have. In addition, Derek has an outstanding student loan and Christina has an outstanding balance on her store card, which she uses to buy clothes.
Question:
Which of Derek and Christina's debts would be classified as a 'bad' debt?- AChristina's outstanding store card balance
- BDerek's student loan
- CThe proposed car loan
- DTheir mortgage
23Case Study 2
Christina and Derek need to buy a new car to commute each day. They have seen a car costing £9,000 but have yet to decide how to fund it. The choices available to them are:
Using their joint credit card (variable interest rate 18.9%), making minimum repayments each month.
Taking up the dealer’s offer of a fixed-rate personal loan at 9.9% over 5 years.
Borrowing the money, interest-free, from Derek’s parents.
Using their emergency fund.
Christina and Derek also have a mortgage, which has just come to the end of its fixed rate. The current variable rate is 4.69%. They are concerned about how future interest rate rises might impact on their mortgage payments and on any car loan payments they might have. In addition, Derek has an outstanding student loan and Christina has an outstanding balance on her store card, which she uses to buy clothes.
Question:
If consumer spending slows down overall, how will this benefit Derek and Christina? It is likely to lead to:- Aeconomic growth
- Bhigher inflation
- Chigher interest rates
- Dlower interest rates
24Case Study 3
Max, aged 49, lives in a rented flat ten miles away from the university where he works. There is no public transport and Max needs his car to travel to and from work each day. Max had debt problems after losing his previous job in 2009 due to the financial crisis, but has managed to avoid borrowing money for the last four years. As a result, his credit rating is now satisfactory and he has access to a £150 overdraft facility with his bank. He has no savings and has only £120 in his bank account.
Max is due to receive his monthly salary into his account in two weeks’ time, but his car has just broken down and will cost £340 to repair. The garage has offered to lend him a car while the repairs are carried out.
Question:
Which of the following represents the cost to Max of borrowing money using his overdraft?- AInflation
- BInterest
- CPrinciple
- DRepayments
25Case Study 3
Max, aged 49, lives in a rented flat ten miles away from the university where he works. There is no public transport and Max needs his car to travel to and from work each day. Max had debt problems after losing his previous job in 2009 due to the financial crisis, but has managed to avoid borrowing money for the last four years. As a result, his credit rating is now satisfactory and he has access to a £150 overdraft facility with his bank. He has no savings and has only £120 in his bank account.
Max is due to receive his monthly salary into his account in two weeks’ time, but his car has just broken down and will cost £340 to repair. The garage has offered to lend him a car while the repairs are carried out.
Question:
Max uses his overdraft to pay for the car repairs, what will he have to do in future months?- ADecrease his discretionary spending
- BDecrease his mandatory expenditure
- CIncrease his discretionary spending
- DIncrease his mandatory expenditure
26Case Study 3
Max, aged 49, lives in a rented flat ten miles away from the university where he works. There is no public transport and Max needs his car to travel to and from work each day. Max had debt problems after losing his previous job in 2009 due to the financial crisis, but has managed to avoid borrowing money for the last four years. As a result, his credit rating is now satisfactory and he has access to a £150 overdraft facility with his bank. He has no savings and has only £120 in his bank account.
Max is due to receive his monthly salary into his account in two weeks’ time, but his car has just broken down and will cost £340 to repair. The garage has offered to lend him a car while the repairs are carried out.
Question:
The financial crisis of 2009 was partially caused by too many people:- Abeing employed in the manufacturing sector
- Bbeing employed in the service sector
- Cborrowing money at low interest rates
- Demigrating overseas
27Case Study 3
Max, aged 49, lives in a rented flat ten miles away from the university where he works. There is no public transport and Max needs his car to travel to and from work each day. Max had debt problems after losing his previous job in 2009 due to the financial crisis, but has managed to avoid borrowing money for the last four years. As a result, his credit rating is now satisfactory and he has access to a £150 overdraft facility with his bank. He has no savings and has only £120 in his bank account.
Max is due to receive his monthly salary into his account in two weeks’ time, but his car has just broken down and will cost £340 to repair. The garage has offered to lend him a car while the repairs are carried out.
Question:
Max exceeds his authorised overdraft without first agreeing it with the bank. The immediate consequence of this will be:- Ahis car being repossessed by bailiffs
- BMax applying for a bankruptcy order
- CMax incurring extra fees and charges from the bank
- Dthe bank applying for a debt relief order
28Case Study 4
After 35 years of continuous employment, Alan has stopped working and is now reliant on the state pension and a small private pension for his income. While he is in good overall health, his hearing deteriorated in recent years and he is now deaf. He has always been a good financial planner and is very cautious. For many years he has managed to put some money aside each month in case anything goes wrong at home unexpectedly.
As Alan lives in an isolated area, he is grateful that he has managed to keep pace with changes in technology, and he enjoys Skyping his children. If something can be done via the internet then that is his preference. He would now like to learn how to use an online budget planner and wonders where he could find one.
Question:
Which government-appointed body can offer Alan online tools to help him plan his finances?- AFinancial Conduct Authority
- BFinancial Services Compensation Scheme
- CMoney Advice Service
- DStepChange Debt Charity
29Case Study 4
After 35 years of continuous employment, Alan has stopped working and is now reliant on the state pension and a small private pension for his income. While he is in good overall health, his hearing deteriorated in recent years and he is now deaf. He has always been a good financial planner and is very cautious. For many years he has managed to put some money aside each month in case anything goes wrong at home unexpectedly.
As Alan lives in an isolated area, he is grateful that he has managed to keep pace with changes in technology, and he enjoys Skyping his children. If something can be done via the internet then that is his preference. He would now like to learn how to use an online budget planner and wonders where he could find one.
Question:
At which stage of the personal life cycle is Alan?- AMature adult
- BMiddle age
- COld age
- DYoung adult
30Case Study 4
After 35 years of continuous employment, Alan has stopped working and is now reliant on the state pension and a small private pension for his income. While he is in good overall health, his hearing deteriorated in recent years and he is now deaf. He has always been a good financial planner and is very cautious. For many years he has managed to put some money aside each month in case anything goes wrong at home unexpectedly.
As Alan lives in an isolated area, he is grateful that he has managed to keep pace with changes in technology, and he enjoys Skyping his children. If something can be done via the internet then that is his preference. He would now like to learn how to use an online budget planner and wonders where he could find one.
Question:
Given his circumstances, which of the following methods of banking is Alan likely to prefer?- ABranch-based banking
- BOnline banking
- CPostal banking
- DTelephone banking
31Case Study 4
After 35 years of continuous employment, Alan has stopped working and is now reliant on the state pension and a small private pension for his income. While he is in good overall health, his hearing deteriorated in recent years and he is now deaf. He has always been a good financial planner and is very cautious. For many years he has managed to put some money aside each month in case anything goes wrong at home unexpectedly.
As Alan lives in an isolated area, he is grateful that he has managed to keep pace with changes in technology, and he enjoys Skyping his children. If something can be done via the internet then that is his preference. He would now like to learn how to use an online budget planner and wonders where he could find one.
Question:
Alan's electricity bill varies considerably each month. Which is the most convenient payment method for him to use to pay the bill?- ACash
- BCheque
- CDirect debit
- DStanding order
32Case Study 5
Suzi, a full-time student, has just celebrated her 21st birthday. For her birthday she received £1,000 cash, which she plans to use to buy a new coat, some shoes and sunglasses. Suzi's parents had hoped that she would save at least some of the money, but Suzi wants to treat herself as it is a special birthday.
Suzi’s parents are more than a little concerned about Suzi’s finances in general, as she tends to have more money going out each month than she has coming in. Suzi is interested in fashion and is always reading magazines featuring the latest brands and trends, but she understands the importance of shopping around and hopes to have at least a little money left over.
Question:
Which of the following factors most shapes Suzi's spending habits?- AAnticipated changes in interest rates
- BGovernment predictions for inflation
- CSuzi's own attitude towards money
- DSuzi's parents' attitudes towards money
33Case Study 5
Suzi, a full-time student, has just celebrated her 21st birthday. For her birthday she received £1,000 cash, which she plans to use to buy a new coat, some shoes and sunglasses. Suzi's parents had hoped that she would save at least some of the money, but Suzi wants to treat herself as it is a special birthday.
Suzi’s parents are more than a little concerned about Suzi’s finances in general, as she tends to have more money going out each month than she has coming in. Suzi is interested in fashion and is always reading magazines featuring the latest brands and trends, but she understands the importance of shopping around and hopes to have at least a little money left over.
Question:
At Suzi's stage of the personal life cycle, which of the following is likely to be of most importance to her?- AProtecting her income in the event of death
- BProtecting her income in the event of illness
- CSaving for retirement
- DThe need for independence and her own space
34Case Study 5
Suzi, a full-time student, has just celebrated her 21st birthday. For her birthday she received £1,000 cash, which she plans to use to buy a new coat, some shoes and sunglasses. Suzi's parents had hoped that she would save at least some of the money, but Suzi wants to treat herself as it is a special birthday.
Suzi’s parents are more than a little concerned about Suzi’s finances in general, as she tends to have more money going out each month than she has coming in. Suzi is interested in fashion and is always reading magazines featuring the latest brands and trends, but she understands the importance of shopping around and hopes to have at least a little money left over.
Question:
Suzi's approach of shopping around could help her avoid:- Aa budget deficit
- Ba budget surplus
- Ca credit rating
- Dvalue added tax
35Case Study 5
Suzi, a full-time student, has just celebrated her 21st birthday. For her birthday she received £1,000 cash, which she plans to use to buy a new coat, some shoes and sunglasses. Suzi's parents had hoped that she would save at least some of the money, but Suzi wants to treat herself as it is a special birthday.
Suzi’s parents are more than a little concerned about Suzi’s finances in general, as she tends to have more money going out each month than she has coming in. Suzi is interested in fashion and is always reading magazines featuring the latest brands and trends, but she understands the importance of shopping around and hopes to have at least a little money left over.
Question:
Cutting back on what type of expenditure would be the most effective way for Suzi to deal with any budget deficit?- ACompulsory
- BDiscretionary
- CEssential
- DMandatory
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- Description
- Level 2 PERSONAL FINANCE (CeFF) Quiz on Specimen Paper B - Unit 2 - Practices of Managing Money (PMM), created by Carina Storm on 23/03/2019.
- Author
- Carina Storm
- Language
- English
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