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Questions and Answers
What is the total duration of the Unit 3 exam?
What is the total duration of the Unit 3 exam?
2 hours
What is the total number of sections in the Unit 3 exam?
What is the total number of sections in the Unit 3 exam?
What percentage of the total marks does Section A account for?
What percentage of the total marks does Section A account for?
one-third
Section B contains questions on business finance unit content.
Section B contains questions on business finance unit content.
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Which of the following is NOT a type of question that might appear in the Unit 3 exam?
Which of the following is NOT a type of question that might appear in the Unit 3 exam?
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What is the name of the website mentioned in the document?
What is the name of the website mentioned in the document?
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What does MONEY act as? (List all four functions)
What does MONEY act as? (List all four functions)
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Provide one example from the document of what could influence a person's attitude to money.
Provide one example from the document of what could influence a person's attitude to money.
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List the three significant effects of bankruptcy that are mentioned in the document.
List the three significant effects of bankruptcy that are mentioned in the document.
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What is the name of the website mentioned in the document related to the role of money?
What is the name of the website mentioned in the document related to the role of money?
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What does the document mention about interest rates?
What does the document mention about interest rates?
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What does the document suggest that people should do to counteract the effects of inflation?
What does the document suggest that people should do to counteract the effects of inflation?
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What is the other term for "planning expenditure"?
What is the other term for "planning expenditure"?
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What are the three personal insurances mentioned in the document?
What are the three personal insurances mentioned in the document?
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Name the sheet that the document suggests completing as part of an activity.
Name the sheet that the document suggests completing as part of an activity.
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What are the three main financial needs people experience in their old age?
What are the three main financial needs people experience in their old age?
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Match the following key terms with their definitions
Match the following key terms with their definitions
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What is the document suggesting to do with the £20 note mentioned?
What is the document suggesting to do with the £20 note mentioned?
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Study Notes
Unit 3 Exam: Personal and Business Finance
- The exam is 2 hours long, written format.
- The exam paper has 2 sections.
- Section A covers personal finance, accounting for one-third of the marks.
- Section B covers business finance, accounting for two-thirds of the marks.
- The exam includes short answer questions, calculations, and extended writing.
Functions of Money
- Money acts as a unit of account, meaning value can be assigned to goods and services for pricing.
- Money functions as a means of exchange, enabling trade and transactions.
- Money serves as a store of value, allowing savings and future purchases.
- Money is legal tender, a recognized form of payment for various goods and services.
Role of Money is Affected By
- Personal attitudes towards risk, reward, saving, spending, and borrowing (credit, debt).
- Life stages (childhood to adulthood), impacting financial needs and attitudes.
- Cultural factors, including religion, tradition, and ethnic background, influencing saving and borrowing habits.
- Life events like university, marriage, property, illness, and financial losses.
- External influences such as economic shifts, job opportunities, and benefits, affecting spending and saving.
- Interest rates: Low rates encourage borrowing and spending, while high rates promote saving.
Principles to Consider for Planning Expenditure
- Avoid debt: Interest payments increase the borrowed amount.
- Control costs: Limit unnecessary spending and create a budget.
- Avoid legal action: Ensure solvency to meet daily expenses and repay debts.
- Maintain good credit rating: Good credit scores allow future borrowing at lower costs.
- Avoid bankruptcy: Avoid situations where debts cannot be repaid.
- Manage money: Plan purchases to avoid borrowing and facilitate purchasing with cash.
- Generate income and savings: Provide financial security against illness or job loss.
- Set financial goals: Targets for purchases like cars or houses.
- Secure insurance: Protect possessions, holidays, etc., from loss or illness.
- Counteract inflation: Buy items before prices increase.
Key Terms
- Debt: Money owed to another entity.
- Credit rating: A numerical representation of a person's creditworthiness.
- Bankruptcy: A legal status where an individual cannot repay debts.
- Solvent: Ability to pay off debts.
Task: Understanding Attitudes Towards Money
- Discuss how you perceive your attitude to money.
- Evaluate your risk-taking behavior.
- Reflect on instances of irresponsible financial behavior and potential alternative actions.
- Identify factors influencing your attitude towards risk-taking with regards to finances.
Task: Ranking Financial Principles
- (Activity on page 9) Rank the listed principles of planning personal finance from 1 to 5 based on their importance (1 = least important).
Activity: Defining Money and its Different Types
- (Activity on page 10) Define the term "money."
- Create a spider diagram visualizing various types of money.
- Outline money's source (income).
- Detail money's destinations (outflows).
- Discuss the reasons money is needed.
Activity: Life Stages and Financial Needs
- (Activity on page 11) Complete a sheet detailing financial needs at different stages of life, and the implications of those needs.
Task: Student Loans for University, Car Loans, etc.
- (Activity on page 15) Collect information about student loans, car loans, interest rates, and inflation.
Activity: Personal Credit Score
- (Activity on page 16) Assess personal credit score based on the provided scoring system.
Activity: Loan Applications
- (Activity on page 17) Using the provided table, determine the acceptance status of a loan application based on the score.
Activity: Functions and Role of Money, Personal Factors and Consequences of Bankruptcy
- (Activity and discussion on pages 18-19) Explore the functions and role of money, map the factors affecting attitudes toward money, analyze the short-term and long-term impacts of bankruptcy.
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Description
Test your understanding of personal and business finance in this comprehensive exam covering key concepts about the functions of money. The quiz includes questions on risk, saving, spending, and the impact of cultural factors on financial decisions. Each section will challenge your knowledge and application skills.
