MKT361 : Midterm Revision Exam

[CH1] In financial services, proprietary companies are owned by shareholders, while mutual suppliers are owned by their customers.

[CH1] Micro-insurance typically refers to very basic general insurance cover that provides security against risks to relatively low-cost yet high-impact assets.

[CH1] The Financial Policy Committee (FPC), established in the Bank of England, regulates and supervises significant individual firms such as deposit-takers and insurers.

[CH1] Under the FCA's controlled functions, Customer Functions (those managing investments or providing advice to customers) are classified as significant influence functions.

[CH2] Bancassurance (or allfinanz) is a distribution system that involves partnerships between banks and insurers to make insurance products available via bank networks.

[CH2] A term life policy pays the sum assured upon death on an open-ended basis, which is why it is usually more expensive than a whole of life policy.

[CH2] Critical illness insurance, first devised in South Africa in the 1970s, pays out an agreed sum assured upon diagnosis of a life-endangering illness such as cancer.

[CH2] According to the chapter, saving in a cash deposit account is the most complex form of saving, whereas a pension is the simplest.

[CH4] In marketing strategy, efficiency is concerned with doing the right thing, while effectiveness is about doing a particular activity well.

[CH4] The chapter argues that marketing expenditure should be viewed as an investment whose impact is monitored over a longer time period, rather than as an annual cost.

[CH4] 'Value-in-use' emphasizes the idea that value is something customers create through their purchase and use of a product or service.

[CH5] The macro-environment describes those factors that are specific to the particular market in which the organization operates.

[CH5] According to the chapter, high real interest rates may encourage savings, while low real interest rates will tend to encourage borrowing.

[CH5] In SWOT analysis, the 'matching' strategic option involves converting weaknesses into strengths in order to take advantage of a particular opportunity.

[CH5] A core competence typically arises from a combination of resources and competences which are of value in relation to a particular market.

[CH1] In one country, each individual state has its own insurance regulator (titled commissioner, superintendent or director), and these commissioners together form a national association to promote uniformity in regulation. Which country's approach is this?

[CH1] Which of the following is one of the four statutory objectives that the Financial Services and Markets Act laid down for the FSA?

[CH1] After a series of crises such as the collapse of Barings Bank, Enron and WorldCom, regulators worldwide began co-operating on common rules such as anti-money laundering. This reflects which stage in the development of financial services regulation?

[CH1] Before allowing a firm to provide financial services in the UK, the FCA examines the quality of its management, how financially strong it is and the calibre of its staff. The FCA is assessing whether the firm is:

[CH1] An insurer designs a savings plan for young working families, but then promotes it through a mass mailing to retired people, for whom its features are of little use. No advice is given to anyone. Which Treating Customers Fairly (TCF) outcome is most clearly being neglected?

[CH1] Supporters of the mutual form argue that mutuality delivers tangible performance benefits to customers mainly because:

[CH1] In the discussion of lifetime income smoothing, which two life stages are described as periods of considerable cost with no income from employment?

[CH2] A supermarket chain with no history in finance starts selling motor and travel insurance from display racks at its checkouts as part of a brand-stretch diversification strategy. In the chapter's terms, the supermarket is:

[CH2] A customer buys a sofa and a finance company pays the furniture store directly. The customer then repays the finance company the principal sum plus interest. This arrangement is best described as:

[CH2] Why has the current account increasingly become a 'loss leader' for banks?

[CH2] Ahmed, aged 65, has a maturing pension fund and wants to convert the lump sum into a regular monthly income paid until his death. Which product best meets this need?

[CH2] A self-employed graphic designer worries about losing her income if an illness or disability stops her from working for a long period. Which policy is designed for this risk?

[CH2] Which of the following is a defining characteristic of a savings endowment?

[CH2] A homeowner replaces her existing mortgage with a new one from a different lender because the new lender offers a lower interest rate. This is known as:

[CH4] A bank attracts premium customers by offering Platinum and VIP accounts that give them a sense of 'specialness'. The bank is mainly delivering which type of benefit?

[CH4] Within a financial services provider, which level of strategy is concerned with the overall development of the business and includes specific strategies such as IT, HR and marketing strategy?

[CH4] According to the chapter, where do the best opportunities for enhancing a financial services provider's financial performance come from?

[CH4] A section of a marketing plan decides which combination of products and markets the organization will serve and how it will compete. This section deals with:

[CH5] Which acronym for analysing the macro-environment includes both Legal and Environmental factors?

[CH5] An analyst at a Bahraini bank notes that more customers are working longer hours and therefore place greater importance on accessing their accounts through ATMs, telephone and Internet banking. In PEST terms, this changing pattern of work belongs mainly to the:

[CH5] Increasing numbers of people buy property to rent out (buy-to-let) as a way to provide income and capital in old age instead of saving in a pension. For pension providers, this illustrates which of Porter's five forces?

[CH5] According to the chapter, in personal (retail) markets the bargaining power of individual financial services consumers is generally:

[CH5] A bank manager asks whether the bank's highly skilled investment advisers could easily be hired away by a rival bank. Which criterion for auditing the internal environment is she applying?

[CH5] A Gulf bank identifies its modern IT systems, branch premises, equipment and operating procedures as key assets for competing. These are examples of which type of resource?

[CH5] A credit card issuer notices growing demand for foreign travel among its target customers and sees it as a chance to increase card sales. In SWOT terms, this is:

[CH1] List and explain the six Treating Customers Fairly (TCF) outcomes.

[CH1] Following the changes of 1st April 2013, explain the roles of the Financial Policy Committee (FPC), the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA), and state the FCA's three statutory objectives.

[CH2] Distinguish between a loan and credit, and between 'savings' and 'investment' as these terms are used in the chapter. Give an example of each.

[CH2] Explain the main life and health insurance products described in the chapter: whole of life, term life, critical illness, permanent health, private health and long term care insurance.

[CH4] A marketing strategy is usually presented in the form of a marketing plan. List and explain the important features of a good marketing plan.

[CH4] 'Delivering superior value to customers lies at the heart of strategic marketing.' Explain the concepts of value-in-exchange and value-in-use, and discuss the different types of benefits through which customers realise value, with financial services examples.

[CH5] Using Porter's five forces model, explain how each force can affect the profitability and attractiveness of the financial services industry.

[CH5] Explain the main types of resources a financial services organization holds, distinguish between competences and core competences, and outline the criteria used in auditing the internal environment.

[CH2] Identify the distribution model created by the agreement between Gulf Crescent Bank and the insurer, and explain why its emergence is significant for the financial services marketplace.

[CH2] The board is keeping free current accounts even though most of them lose money. Using the relevant concept from the chapter, explain the logic of this decision and the role of the new data system.

[CH1] Identify the two Treating Customers Fairly (TCF) outcomes that the two complaints show the bank is failing to deliver, linking each one to the case details.

[CH5] Classify the main facts in the case into a SWOT analysis (one strength, one weakness, one opportunity and one threat), explaining why each belongs in its category.

[CH5] Pearl Shield plans to promote its fast claims app to companies that must now buy health insurance for expatriate workers. Which of the two SWOT strategic options does this represent? Explain your answer.

[CH4] Using the CEO's statement, explain the difference between efficiency and effectiveness, and evaluate the finance director's proposal to cut marketing spending.