Summary BTEC Business Level 3: Unit 1 -
Exploring Businesses
what are the 6 types of personal borrowing? - answers mortgages, hire purchase,
payday loans, overdraft, personal loans, credit cards
personal loan - answers gives you the ability to borrow a set amount of money, normally
for a specific purpose, to be repaid in regular instalments.
payday loan - answers short term source of finance used to bridge the gaps between
now and next receiving a wage
credit card - answers goods are paid for by card and can be paid for either at the end of
a set period, normally a month, when a statement is issued
overdraft - answers allows you to withdraw money that you don't have in a current
account
mortgage - answers long-term loan to fund the purchase of assets, normally paid back
over a long time, usually 25 years. it is secured against an item like a house.
hire purchase - answers allows you to have use of an item immediately but pay for it in
regular instalments. the item remains the property of the seller until all instalments have
been made
what are the 6 saving and investment options? - answers ISA, deposits & savings
account, premium bonds, bonds & gilts, shares, pensions
when are saving and investment options available? - answers when you are earning or
receiving more money than you need to cover your expenditure
Individual savings account (ISA) - answers a type of saving account where the holder is
not charged income tax on the interest received.
deposit and savings account - answers accounts where interest is paid on the balance
and normally the holder needs to give notice before withdrawing funds
premium bonds - answers government scheme that allows individuals to save up to a
set amount by buying bonds. the bond holder doesn't receive interest on their savings
but each bond is placed into a regular draw for cash prizes
bonds & gilts - answers fixed term securities where the lender lends money to
companies and governments in return for interest payments. the money is invested for a
specific period of time
,shares - answers involve investment in a business in return for equity. the shareholder
will receive dividends from the company's profits and will also want the value of the
shares to increase
pensions - answers long term saving plans where individuals make regular
contributions, called premium payments, throughout their working life. this is then repaid
as either a lump sum, regular payments or a combinations of the two upon retirement.
how is inflation a risk to your savings? - answers inflation can reduce the spending
power of any money saved.
what is the risk of saving money? - answers low or zero risk as the money saved is
guaranteed to be available in the furture
what are the benefits of saving money? - answers provides financial security/peace of
mind and there are interest payments
why are investments a risk? - answers they can go wrong and all or some of the value
may be lost and there is no guarantee of a return
what are the benefits of investing your money? - answers if it's successful, there is a
potential for a high financial return and they can be exciting for some people, some
invest in shares, antiques or art.
what is insurance? - answers a form of protection where specific items, as a well as
individuals and pets can be insured.
what do insurance policies cover? - answers the cost of loss, damage or illness up to
prearranged levels in return for regular payments called premiums
what are the advantages of car insurance? - answers meets legal requirements,
protects oneself against theft or damage and protects against damage caused to a third
party.
what are the advantages of home & contents insurance? - answers replaces items that
may have been lost or damaged, covers accidents that happens, covers large damage
they you may not otherwise be able to cover, eliminates some stress from worrying
about life and low deductible compared to cost of repair
what are the advantages of life insurance? - answers provides permanent protection,
flexible, tax benefits, low premiums for new policies
what are the advantages of travel insurance? - answers good for emergencies (can get
booking costs back if your flights are cancelled), if you contract a disease your travel
,insurance will cover treatment costs that your medical insurance might not, may policies
provide coverage for lost, stolen or damaged luggage
what are the advantages of pet insurance? - answers can cover unexpected vet bills,
provides peace of mind, can save the life of your pet, allows you to know your veterinary
costs ahead of time
what are the advantages of health insurance? - answers gives you the opportunity to
maintain or improve your health by providing a low cost way to attend your physician
visits and buying affordable prescription drugs, flexible plans that can be customised,
covers surgery and emergency bills, provides peace of mind
what are the disadvantages of car insurance? - answers premiums can be high
depending upon assessed level of risk, normally there is an excess that must be paid
what are the disadvantages of home & contents insurance? - answers doesn't cover
flood damage or freezing of plumbing, extra monthly payment, high monthly premium
because of low deductible, coverage of jewellery costs more to get.
what are the disadvantages of life insurance? - answers fixed periods of coverage,
premiums may increase, limited options for people of poor health
what are the disadvantages of travel insurance? - answers can be expensive and can
sometimes outweigh the cost of your holiday, may not cover everything that you need
coverage on.
what are the disadvantages of pet insurance? - answers may need to make a claim on
your policy and may need to pay for a post mortem if your pet passes away, pre-existing
conditions aren't covered, doesn't cover routine vaccinations and other treatments
what are the disadvantages of health insurance? - answers can be unaffordable for
some, very confusing policies, can apply and be denied coverage altogether, tends not
to cover pre-existing conditions.
what the advantages of ISAs? - answers tax isn't charged on interest earned allowing
the saver to keep all of the rewards for saving, interest rates are sometimes slightly
higher than in alternative savings accounts
what the advantages of deposit and savings accounts? - answers provides protections,
majority of banks and credit unions are insured so the money is secured and safe, easy
to setup, simple to withdraw money from a savings account, entitled to 6 withdrawals
per month, can open an account with little money
what the advantages of premium bonds? - answers no risk of losing money because
premium bonds are supported by the government, instant access can withdraw your
investment anytime, tax-free returns
, what the advantages of bonds and gilts? - answers safe investments, interest payments
of bonds are sometimes higher than the general level of dividend payments, often liquid,
have legal protections
what the advantages of shares? - answers don't have to travel or do any physical work,
very flexible can work in your own time, less investment
what the advantages of pensions? - answers tax won't be paid on your pension
contribution, compound interest so the earlier you start the better, guaranteed income at
the end, employer contributes each month
what the disadvantages of pensions? - answers lack of access can't access your
pension finds until you're 55, risk of poor returns as your pension will be invested into
stocks and shares, very complicated
what the disadvantages of shares? - answers if you buy the wrong shares it could result
in a heavy loss, quarterly results can result in a drastic change in the price of shares
what the disadvantages of bonds and gilts? - answers not 100% secure, can lose much
or all of their money if the company goes bankrupt, same bonds a re callable - so the
company can choose to pay the bond off early
what the disadvantages of premium bonds? - answers no interest if your bonds aren't
chosen in the monthly prize draw you won't receive any returns, low odds very unlikely
to win, loses value if you make a withdrawl
what the disadvantages of deposit and savings accounts? - answers may be bank fess
like account or maintenance fees especially if you maintain low balances, may be
required to carry a minimum amount if it falls below the amount the bank may charge
fees
what the disadvantages of ISAs? - answers notice is often required to make withdrawals
and according to the agreement there may be a limit set of the number of withdrawals
made, if the saver makes more withdrawals than set out in the agreement then the
penalty may cancel out the tax savings, limit set on the annual amount that can be
placed in an ISA.
what are financial institutions? - answers organisations that offer financial services to
individuals and businesses
what are the 8 examples of financial institutions? - answers banks, building societies,
pension companies, payday loan companies, pawnbrokers, insurance companies, credit
unions, NSI
Exploring Businesses
what are the 6 types of personal borrowing? - answers mortgages, hire purchase,
payday loans, overdraft, personal loans, credit cards
personal loan - answers gives you the ability to borrow a set amount of money, normally
for a specific purpose, to be repaid in regular instalments.
payday loan - answers short term source of finance used to bridge the gaps between
now and next receiving a wage
credit card - answers goods are paid for by card and can be paid for either at the end of
a set period, normally a month, when a statement is issued
overdraft - answers allows you to withdraw money that you don't have in a current
account
mortgage - answers long-term loan to fund the purchase of assets, normally paid back
over a long time, usually 25 years. it is secured against an item like a house.
hire purchase - answers allows you to have use of an item immediately but pay for it in
regular instalments. the item remains the property of the seller until all instalments have
been made
what are the 6 saving and investment options? - answers ISA, deposits & savings
account, premium bonds, bonds & gilts, shares, pensions
when are saving and investment options available? - answers when you are earning or
receiving more money than you need to cover your expenditure
Individual savings account (ISA) - answers a type of saving account where the holder is
not charged income tax on the interest received.
deposit and savings account - answers accounts where interest is paid on the balance
and normally the holder needs to give notice before withdrawing funds
premium bonds - answers government scheme that allows individuals to save up to a
set amount by buying bonds. the bond holder doesn't receive interest on their savings
but each bond is placed into a regular draw for cash prizes
bonds & gilts - answers fixed term securities where the lender lends money to
companies and governments in return for interest payments. the money is invested for a
specific period of time
,shares - answers involve investment in a business in return for equity. the shareholder
will receive dividends from the company's profits and will also want the value of the
shares to increase
pensions - answers long term saving plans where individuals make regular
contributions, called premium payments, throughout their working life. this is then repaid
as either a lump sum, regular payments or a combinations of the two upon retirement.
how is inflation a risk to your savings? - answers inflation can reduce the spending
power of any money saved.
what is the risk of saving money? - answers low or zero risk as the money saved is
guaranteed to be available in the furture
what are the benefits of saving money? - answers provides financial security/peace of
mind and there are interest payments
why are investments a risk? - answers they can go wrong and all or some of the value
may be lost and there is no guarantee of a return
what are the benefits of investing your money? - answers if it's successful, there is a
potential for a high financial return and they can be exciting for some people, some
invest in shares, antiques or art.
what is insurance? - answers a form of protection where specific items, as a well as
individuals and pets can be insured.
what do insurance policies cover? - answers the cost of loss, damage or illness up to
prearranged levels in return for regular payments called premiums
what are the advantages of car insurance? - answers meets legal requirements,
protects oneself against theft or damage and protects against damage caused to a third
party.
what are the advantages of home & contents insurance? - answers replaces items that
may have been lost or damaged, covers accidents that happens, covers large damage
they you may not otherwise be able to cover, eliminates some stress from worrying
about life and low deductible compared to cost of repair
what are the advantages of life insurance? - answers provides permanent protection,
flexible, tax benefits, low premiums for new policies
what are the advantages of travel insurance? - answers good for emergencies (can get
booking costs back if your flights are cancelled), if you contract a disease your travel
,insurance will cover treatment costs that your medical insurance might not, may policies
provide coverage for lost, stolen or damaged luggage
what are the advantages of pet insurance? - answers can cover unexpected vet bills,
provides peace of mind, can save the life of your pet, allows you to know your veterinary
costs ahead of time
what are the advantages of health insurance? - answers gives you the opportunity to
maintain or improve your health by providing a low cost way to attend your physician
visits and buying affordable prescription drugs, flexible plans that can be customised,
covers surgery and emergency bills, provides peace of mind
what are the disadvantages of car insurance? - answers premiums can be high
depending upon assessed level of risk, normally there is an excess that must be paid
what are the disadvantages of home & contents insurance? - answers doesn't cover
flood damage or freezing of plumbing, extra monthly payment, high monthly premium
because of low deductible, coverage of jewellery costs more to get.
what are the disadvantages of life insurance? - answers fixed periods of coverage,
premiums may increase, limited options for people of poor health
what are the disadvantages of travel insurance? - answers can be expensive and can
sometimes outweigh the cost of your holiday, may not cover everything that you need
coverage on.
what are the disadvantages of pet insurance? - answers may need to make a claim on
your policy and may need to pay for a post mortem if your pet passes away, pre-existing
conditions aren't covered, doesn't cover routine vaccinations and other treatments
what are the disadvantages of health insurance? - answers can be unaffordable for
some, very confusing policies, can apply and be denied coverage altogether, tends not
to cover pre-existing conditions.
what the advantages of ISAs? - answers tax isn't charged on interest earned allowing
the saver to keep all of the rewards for saving, interest rates are sometimes slightly
higher than in alternative savings accounts
what the advantages of deposit and savings accounts? - answers provides protections,
majority of banks and credit unions are insured so the money is secured and safe, easy
to setup, simple to withdraw money from a savings account, entitled to 6 withdrawals
per month, can open an account with little money
what the advantages of premium bonds? - answers no risk of losing money because
premium bonds are supported by the government, instant access can withdraw your
investment anytime, tax-free returns
, what the advantages of bonds and gilts? - answers safe investments, interest payments
of bonds are sometimes higher than the general level of dividend payments, often liquid,
have legal protections
what the advantages of shares? - answers don't have to travel or do any physical work,
very flexible can work in your own time, less investment
what the advantages of pensions? - answers tax won't be paid on your pension
contribution, compound interest so the earlier you start the better, guaranteed income at
the end, employer contributes each month
what the disadvantages of pensions? - answers lack of access can't access your
pension finds until you're 55, risk of poor returns as your pension will be invested into
stocks and shares, very complicated
what the disadvantages of shares? - answers if you buy the wrong shares it could result
in a heavy loss, quarterly results can result in a drastic change in the price of shares
what the disadvantages of bonds and gilts? - answers not 100% secure, can lose much
or all of their money if the company goes bankrupt, same bonds a re callable - so the
company can choose to pay the bond off early
what the disadvantages of premium bonds? - answers no interest if your bonds aren't
chosen in the monthly prize draw you won't receive any returns, low odds very unlikely
to win, loses value if you make a withdrawl
what the disadvantages of deposit and savings accounts? - answers may be bank fess
like account or maintenance fees especially if you maintain low balances, may be
required to carry a minimum amount if it falls below the amount the bank may charge
fees
what the disadvantages of ISAs? - answers notice is often required to make withdrawals
and according to the agreement there may be a limit set of the number of withdrawals
made, if the saver makes more withdrawals than set out in the agreement then the
penalty may cancel out the tax savings, limit set on the annual amount that can be
placed in an ISA.
what are financial institutions? - answers organisations that offer financial services to
individuals and businesses
what are the 8 examples of financial institutions? - answers banks, building societies,
pension companies, payday loan companies, pawnbrokers, insurance companies, credit
unions, NSI
