DIPFS Unit 4 SPECIMEN C 1-10

Which of the following is true of payday lenders?

• They adversely affect a person's credit score.

• They generally require a house as security.

• They have very competitive interest rates.

• Using a payday lender will not affect a person's credit score.

Why have credit unions become an attractive and useful alternative to traditional banks for some customers? Because credit unions:

• are not regulated.

• have a strong ethical philosophy.

• have a weak Corporate Social Responsibility policy.

• have more assets than traditional banks.

Which of the following provides the most direct competition to traditional banks in consumer-based financial services?

• Challenger banks.

• Credit unions.

• Friendly societies.

• Peer-to-peer organisations.

Which of the following is true of peer-to-peer lenders?

• Access to services is only available via branches.

• Depositors' money is not guaranteed by the FSCS.

• They are run, managed and funded by the major banks.

• They only offer savings accounts.

Under the Current Account Switch Service, for how many months after the switch will payments be redirected from the old account to the new account?

• 6 months.

• 7 months.

• 12 months.

• 13 months.

Which of the following is true in a competitive market?

• Customers will never have to complain.

• High pricing can be easily sustained.

• Products should suit customer needs.

• Switching between providers will be rare.

An increase in the number of challenger banks should cause providers to:

• cut advertising costs.

• increase customer retention.

• increase prices.

• open new branches.

Major financial services providers have responded positively to increasing competition in the market. As a result, which of the following have they mostly used to attract new customers?

• Loyalty schemes.

• Offers for people who switch their account.

• Online banking for every customer.

• Using call centres for all types of business.

Which of the following is the most important element of a sustainable financial system? Ensuring that the system:

• can be accessed easily.

• is simple to maintain.

• solves customer queries.

• will not fail.

Under which of the following circumstances is systemic risk the highest? When:

• large providers work closely with each other.

• providers are reluctant to work with each other.

• providers focus on a local market

• providers focus on short-term objectives.