LIBF Level 3 Diploma in Financial Studies

(DipFS) – 600 / 8551 / 4

Unit 3: Sustainability of an Individual’s Finances (SIF)

Specimen paper: A
Length of examination: 1 hour

Instructions to learners

1. Open this question paper when instructed to do so.

2. Answer all questions.

3. Use the examination answer sheets provided for your answers. Please do not note
your answers in this booklet, as they will not be recorded.

4. Read the instructions on both sides of the answer sheet carefully.

5. Before you leave the examination room you must hand in all the examination
materials including the answer sheet and question paper.

Information for learners

1. Silent non-programmable (including scientific) calculators are allowed.

This qualification is regulated by the regulatory authorities for England, Wales and Northern Ireland and is
incorporated into the Regulated Qualifications Framework (RQF).
 DipFS Unit 3 – Sustainability of an Individual’s Finances (SIF) Specimen Paper A

Questions begin on page 3

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 DipFS Unit 3 – Sustainability of an Individual’s Finances (SIF) Specimen Paper A

1. Which of the following best describes financial sustainability for individuals?

A Achieving and maintaining a balance between personal income and expenditure.

B Achieving as high an income as possible.

C Satisfying all of an individual’s aspirations.

D Satisfying all of an individual’s needs and wants.

2. In 2008, personal debt in the UK hit a peak of:

A £400bn.

B £800bn.

C £1,100bn.

D £1,400bn.

3. Financial providers should encourage individuals to:

A have an emergency fund equal to one month’s expenditure.

B make their financial planning inflexible.

C occasionally review their financial plans.

D use a budget to plan their spending.

4. Financial services providers should support an individual’s sustainability by encouraging them to:

A arrange an overdraft.

B invest in a unit trust.

C open a notice savings account.

D open a savings account.

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 DipFS Unit 3 – Sustainability of an Individual’s Finances (SIF) Specimen Paper A

5. Financial services providers should support an individual’s sustainability, in relation to the use of
credit cards, by advising them to pay off:

A 50% of the balance each month, if possible.

B 75% of the balance each month, if possible.

C the entire balance each month, if possible.

D the minimum amount required each month, if possible.

6. To be eligible for the new style Jobseeker’s Allowance, an individual can only work on average a
maximum of how many hours per week?

A 14 hours.

B 16 hours.

C 18 hours.

D 20 hours.

7. What is the minimum number of days that an employee must be off sick before the employer has to
pay Statutory Sick Pay?

A One day.

B Four days.

C Five days.

D Seven days.

8. Some benefits are paid to people who are working full-time, but this will depend on their level of
income.

These benefits are:

A flat rate.

B income rate.

C income tested.

D means tested.

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 DipFS Unit 3 – Sustainability of an Individual’s Finances (SIF) Specimen Paper A

9. Car insurance companies are contributing to helping the environment by offering lower premiums to:

A fuel-efficient cars.

B older drivers.

C safer drivers.

D smaller engines.

10. Which of the following is an example of an Islamic home finance arrangement?

A Murabaha.

B Riba.

C Sharia.

D Sukuk.

11. If the Consumer Prices Index (CPI) fell from 5% to 1% now, this means that prices overall:

A are now increasing by 1%.

B are still increasing by 5%.

C have dropped by 4%.

D have not changed.

12. Which of the following ways of presenting data is most suitable to be able to easily see trends at a
glance?

A A graph.

B A list.

C A pie chart.

D A table.

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 DipFS Unit 3 – Sustainability of an Individual’s Finances (SIF) Specimen Paper A

13. Which of the following data would be useful to a consumer who is assessing external factors that
might impact on their short-term financial decisions and plans?

A Affordability of finance.

B Changes in inflation.

C Household income.

D Their family commitments.

14. Which of the following is the first step involved in drawing up a cash-flow?

A Deciding on the time period to be used.

B Identifying and listing all optional expenditure.

C Identifying and listing all sources of income.

D Monitoring the budget regularly.

15. Dave budgeted £800 to be in his bank account at the end of the month, but he has £1,000.

Which of the following could be a reason for this?

A An unexpected bill was due.

B Higher inflation.

C Overestimated income.

D Overestimated expenditure.

16. Which of the following is a method of budgeting that allocates the exact money to each section of
your budget?

A Envelope.

B Fixed.

C Flexible.

D Zero-based.

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 DipFS Unit 3 – Sustainability of an Individual’s Finances (SIF) Specimen Paper A

17. Which of the following budgeting methods requires all funds to be allocated?

A Bucket-based budgeting.

B Pot-based budgeting.

C Target-based budgeting.

D Zero-based budgeting.

18. Which of the following describes the sacrifice that is involved when things change for an individual?

A Alternative cost.

B Offset cost.

C Opportunity cost.

D Social cost.

19. Susan, 24, has recently been made redundant from the restaurant where she has worked as a
waitress for 2 years. Which of the following may she be entitled to claim?

A Employment and Support Allowance.

B Income Support.

C Jobseeker's Allowance.

D Personal Independence Payment.

20. If a woman is employed, her employer must pay Statutory Maternity Pay for up to how many weeks
so that she can take maternity leave?

A 13 weeks.

B 26 weeks.

C 39 weeks.

D 52 weeks.

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 DipFS Unit 3 – Sustainability of an Individual’s Finances (SIF) Specimen Paper A

21. Which of the following is a state benefit, replacing six benefits with a single monthly payment for
those on a low income?

A Family Credit.

B Income Support.

C Jobseeker's Allowance.

D Universal Credit.

22. Which of the following would usually charge the lowest rate of interest?

A Credit card.

B Payday loan.

C Personal loan.

D Store card.

23. Which of the following is a credit reference agency?

A Experian.

B Money Dashboard.

C StepChange.

D Zopa.

24. Financial institutions sometimes show tolerance towards people who are experiencing difficulties in
meeting their mortgage repayments. This is known as:

A loan forbearance.

B loan lenience.

C loan patience.

D loan permission.

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 DipFS Unit 3 – Sustainability of an Individual’s Finances (SIF) Specimen Paper A

25. Kevin has been struggling to pay his debts for a while and has ignored the warnings from his
creditors. As a result, they have taken him to court to resolve the issue.

Which of the following can the court issue?

A(n):

A administration order.

B debt management plan.

C debt relief order.

D individual voluntary arrangement.

26. With a debt management plan, what proportion of the outstanding debt will be repaid?

A 30%.

B 50%.

C 75%.

D 100%.

27. The international integration of business, industry and society through developments in technology,
communication and migration is generally known as:

A globalisation.

B offshoring.

C outsourcing.

D trade expansion.

28. A real GDP growth rate means that it has been adjusted to take into account the:

A balance of payments.

B exchange rate.

C rate of inflation.

D rate of unemployment.

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 DipFS Unit 3 – Sustainability of an Individual’s Finances (SIF) Specimen Paper A

29. Cycles of rapid growth followed by falling output, a return to growth, and then a return to recession
again are known as:

A boom and bust cycles.

B growth cycles.

C money cycles.

D productivity cycles.

30. Which of the following is an example of a movement that is based on a consideration of the
producers in developing countries?

A Consumer Welfare.

B Ethical investments.

C Fair Trade.

D Green Consumer.

31. Which of the following terms describes how a firm can demonstrate that there is a social conscience
behind its business model?

A Community social responsibility.

B Company social regulation.

C Consumer social requirement.

D Corporate social responsibility.

32. The Financial Services (Banking Reform) Act, 2013, restricted payday loan companies in which of
the following ways?

A It banned them from advertising on television.

B It introduced a price cap on payday loans.

C It limited the number of loans they could give to a person.

D It limited the number of payday loan companies that could operate.

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33. Which of the following are the ‘big five’ banks?

A Barclays, Metro Bank, RBS, Virgin Money and the Post Office.

B Lloyds, Tesco Bank, RBS, Barclays and Standard Chartered.

C RBS, HSBC, Lloyds, Barclays and Standard Chartered.

D Virgin Money, HSBC, Lloyds, Standard Chartered and Barclays.

34. Lauren wants to change bank accounts to a new provider, but she is concerned that direct debits
will be missed and she will be charged.

Which of the following ensures this does not happen?

A Her current provider.

B Her new provider.

C The Current Account Switch Guarantee.

D The Financial Ombudsman Service.

35. What was the maximum proportion of the purchase price of a property that was given to a
customer under the government's Help to Buy: equity loan?

A 65%.

B 75%.

C 85%.

D 95%.

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