Unit 39: Financial Investment Opportunities

Transcription

1 Unit 39: Financial Investment Opportunities Unit code: T/601/1042 QCF level: 5 Credit value: 15 credits Aim The aim of this unit is to provide the learner with an understanding of the stock exchange and the range of financial investment opportunities available to individuals living in the UK. Unit abstract Investment savings and financial planning are essential, but often overlooked, skills in managing personal financial affairs. This unit considers the range of investment opportunities available to individuals living in the UK. Learners will learn how to identify investor needs and how UK taxation works in so far as it affects investment decisions. They will discover the range of investment products available from banks, building societies, insurance companies and national savings. Learners will also understand how the stock exchange functions, the range of investments available and how to manage a portfolio of investments. Learning outcomes On successful completion of this unit a learner will: 1 Understand the range of investments available to individuals 2 Understand how the UK system of taxation affects investment decisions 3 Understand investors needs 4 Understand the working of the stock exchange and the range of investments available. BTEC Levels 4 and 5 Higher Nationals specification in Business Units Issue 7 May 2014 Pearson Education Limited

2 Unit content 1 Understand the range of investments available to individuals Differences: between investing and gambling; why some financial products termed investments are actually gambling e.g. spread betting Risk: of different investments; individual attitudes to risk/reward Range: outline of the full range of investments available to individuals in the UK Products: different safe investment products of banks, building societies, insurance companies, friendly societies and national saving Portfolios: construction; low risk or safe investments for different people 2 Understand how the UK system of taxation affects investment decisions Income tax: rates and allowances Tax-free investments: examples to include ISAs Calculation of income tax: payable by different people to include income from dividends and interest on deposits Tax saving strategies: e.g. married couples who transfer assets from a higher rate payer to a standard rate or non-tax paying spouse Capital gains tax: calculations; rate and exemptions Inheritance tax: calculations; rate; exemptions; how to avoid it Tax avoidance and tax evasion: meanings; legality; differences 3 Understand investors needs Different needs: individuals of different ages, domestic commitments and tax rates Portfolios: construction of; financial investments available in the UK for different individuals Financial advisers: what they do; how to choose one; how they get paid Remedies: investors rights and protection Regulation: the FSA and the Ombudsman 4 Understand the working of the stock exchange and the range of investments available Stock exchange: evolution; how it works; how share prices are determined Securities: range available Financial Times: how to read the financial pages; how the figures are calculated; what they mean 204 Pearson BTEC Levels 4 and 5 Higher Nationals specification in Business Units Issue 7 May 2014 Pearson Education Limited 2014

3 Collective investments: investment and unit trusts; open ended investment companies; ISAs Bonds: income and growth; gilt edged or Treasury bonds issued by the UK government BTEC Levels 4 and 5 Higher Nationals specification in Business Units Issue 7 May 2014 Pearson Education Limited

4 Learning outcomes and assessment criteria Learning outcomes On successful completion of this unit a learner will: LO1 Understand the range of investments available to individuals Assessment criteria for pass The learner can: 1.1 assess the attitude of individuals to risk when evaluating the suitability of investments 1.2 evaluate a range of investments available from banks, building societies, insurance companies and national savings 1.3 analyse the suitability of these products for different people LO2 Understand how the UK system of taxation affects investment decisions 2.1 calculate income tax payable for various individuals and couples, including income from dividends and interest 2.2 calculate capital gains tax liabilities in different situations 2.3 evaluate tax-free investments and their importance to different tax payers LO3 Understand investors needs 3.1 identify the needs of different investors 3.2 design portfolios of investments for different individuals 3.3 explain the functions of financial advisers and how to select one 3.4 explain investors rights and the protection available to them LO4 Understand the working of the stock exchange and the range of investments available 4.1 explain the information in the financial pages of The Financial Times 4.2 calculate stock exchange ratios and be able to explain what they mean 4.3 describe and evaluate collective investments, e.g. investment and unit trusts OEICs and bonds. 206 Pearson BTEC Levels 4 and 5 Higher Nationals specification in Business Units Issue 7 May 2014 Pearson Education Limited 2014

5 Guidance Links This unit links to Unit 12: Taxation, within this specification. Essential requirements Arnold: The Financial Times Guide to Investing. The latest edition is essential and is a good basic text. Taxation guides from Which and the Daily Telegraph are updated annually after the Finance Act is amended. A good daily newspaper along with the weekend money and finance sections as found in The Times and The Daily Telegraph. Investors Chronicle every Friday is invaluable for tutors and learners. There are also monthly journals such as What Investment and Money Observer which will be topical and up to date. BTEC Levels 4 and 5 Higher Nationals specification in Business Units Issue 7 May 2014 Pearson Education Limited

6 208 Pearson BTEC Levels 4 and 5 Higher Nationals specification in Business Units Issue 7 May 2014 Pearson Education Limited 2014