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10 Cards in this Set
- Front
- Back
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1. To what extent can deposit accounts be said to be ‘secure’?
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1. Apart from the risk of a bank or building society failing, the capital is secure, but the real value of the capital will be eroded by inflation. The amount of interest could fall on variable interest accounts.
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2. Changes to the taxation of savings interest are being introduced from April 2016. From that date, how much tax will be deducted at source?
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2. None.
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3. State two reasons why offshore investments may be more risky than similar onshore products.
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3. If not denominated in sterling, the value of capital and income will be subject to currency fluctuations. The local regulatory regime may not be as strong as that of the FCA in the UK. |
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4. What is the minimum age at which a person can take out a National Savings and Investments Direct Saver?(a) 11.(b) 16.(c) 18.
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4. (b)16.
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5. What is the difference between the taxation of interest on government stocks and of that on local authority stocks?
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5. Interest on government stocks is normally paid gross (but it is taxable), whereas that on local authority stocks is paid net of 20% tax.
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6. The price/earnings (P/E) ratio of a share indicates the relationship between the share’s current price and the most recently declared dividend. True or false?
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6. False. It relates the share price to the earnings (net profits) per share. Profits are not necessarily all distributed as dividends.
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7. How can a company raise additional finance for expansion without borrowing?
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7. By a rights issue of new shares to existing shareholders.
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8. What is the normal distinction between debentures and other loan stocks?
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8. Debentures are normally secured on company assets.
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9. What change of attitude by lenders led to the establishment of the buy to-let market?
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9. Lenders began to treat buy-to-let business as residential rather than commercial, applying different underwriting principles and lower interest rates.
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10. What type of tenancy agreement would normally be used for a buy-to-let property?
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10. Assured shorthold tenancy.
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