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Financial Literacy Quiz

Total questions: 100

Worksheet time: 50mins

Name
Class
Date
1.

What is the purpose of liability insurance?

a)

To compensate for losses caused to others

b)

To reduce tax liability

c)

To create new assets

d)

To increase the value of assets

2.

What is a loan?

a)

A type of insurance

b)

Money saved for future use

c)

Money borrowed that must be repaid with interest

d)

A type of investment

3.

Which type of loan is typically unsecured?

a)

Home loan

b)

Mortgage loan

c)

Personal loan

d)

Auto loan

4.

Which investment typically has the highest potential return?

a)

Stocks

b)

Savings account

c)

Bonds

d)

Fixed deposits

5.

What is assurance in the context of insurance?

a)

None of the above

b)

Insurance covering health expenses

c)

Insurance covering property loss

d)

Insurance covering life

6.

Which type of bank account typically earns interest?

a)

Current account

b)

Savings account

c)

Checking account

d)

Demat account

7.

What is an ATM used for?

a)

All of the above

b)

Withdrawing money

c)

Depositing money

d)

Checking account balances

8.

The term “default in borrowing” refers to:

a)

Paying off a loan early

b)

None of the above

c)

Failure to repay a loan

d)

Applying for a new loan

9.

What is savings?

a)

Money borrowed from a bank

b)

Money spent on daily expenses

c)

Money set aside for future use

d)

None of the above

10.

What is the key function of insurance?

a)

Protect assets from damage

b)

Compensate loss due to damage

c)

Reduce asset value

d)

Increase the value of assets

11.

RTGS stands for:

a)

Real Time Gross Settlement

b)

Real Transfer Gross Settlement

c)

Real Time Guaranteed Settlement

d)

Real Time Gross Savings

12.

What is GST?

a)

Goods and Services Tax

b)

General Sales Tax

c)

General Services Tax

d)

None of the above

13.

Benefit of a Systematic Investment Plan (SIP)?

a)

Regular and disciplined investment

b)

Lower risk compared to other plans

c)

Higher interest rates

d)

Investing a large sum at once

14.

The history of insurance dates back to:

a)

Ancient India

b)

None of the above

c)

Ancient Greece

d)

Ancient China

15.

Who regulates insurance in India?

a)

IRDA

b)

NITI Aayog

c)

RBI

d)

SEBI

16.

Which is a low-risk investment?

a)

Fixed deposit

b)

Stocks

c)

Real estate

d)

Mutual funds

17.

Impact of inflation on purchasing power?

a)

Decreases purchasing power

b)

Increases purchasing power

c)

None of the above

d)

Stabilizes purchasing power

18.

A SIP involves:

a)

Regularly investing a fixed sum of money

b)

Investing a lump sum amount

c)

Investing in real estate

d)

None of the above

19.

Which is a financial asset?

a)

Equity shares

b)

Artifacts

c)

Gold

d)

Real estate

20.

Inflation is calculated by:

a)

Measuring increase in prices over time

b)

Measuring stability in prices

c)

None of the above

d)

Measuring decrease in prices

21.

Bank account for business transactions?

a)

Current account

b)

Savings account

c)

Fixed deposit account

d)

Demat account

22.

First fire insurance company was due to:

a)

Great Fire of London

b)

Earthquake in Japan

c)

Global Financial Crisis

d)

Indian Independence

23.

Money in a piggy bank is:

a)

Available for immediate withdrawal

b)

Not earning interest

c)

Earning interest

d)

Both B and C

24.

FV = PV(1+iN) calculates:

a)

Future Value

b)

Rate of Interest

c)

Risk Factor

d)

Present Value

25.

Main purpose of social insurance?

a)

None of the above

b)

Provide life coverage

c)

Cover property damage

d)

Protect against unemployment and disability

26.

Which carries the highest risk?

a)

Savings account

b)

Stocks

c)

Bonds

d)

Fixed deposits

27.

Main purpose of savings?

a)

Future use and emergencies

b)

Immediate consumption

c)

Payment of loans

d)

Investment in stocks

28.

What is collateral in loans?

a)

The interest rate

b)

The monthly repayment amount

c)

An asset pledged to secure the loan

d)

The amount borrowed

29.

Implication of education loan?

a)

Must be repaid with interest

b)

All of the above

c)

Affects credit score

d)

Provides tax benefits

30.

Type of life insurance?

a)

Endowment plan

b)

Whole life insurance

c)

Term insurance

d)

All of the above

31.

The cost of borrowing money is known as:

a)

EMI

b)

Principal

c)

Loan term

d)

Interest

32.

Net Asset Value (NAV) is used in the context of:

a)

Fixed deposits

b)

Savings accounts

c)

Loans

d)

Mutual funds

33.

Which of the following is a type of inflation?

a)

Demand-pull inflation

b)

Cost-push inflation

c)

All of the above

d)

Built-in inflation

34.

If you invest $100 at 5% interest compounded annually, future value after 5 years?

a)

$127.63

b)

$105

c)

$1000

d)

$552.60

35.

Which type of loan is typically secured by collateral?

a)

Home loan

b)

Credit card loan

c)

Personal loan

d)

Student loan

36.

Which type of bank account is used for daily transactions?

a)

Savings account

b)

Recurring deposit account

c)

Checking account

d)

Fixed deposit account

37.

The concept of ‘compounding’ refers to:

a)

Earning interest on both principal and accumulated interest

b)

None of the above

c)

Earning interest on the principal only

d)

Losing interest over time

38.

IMPS allows fund transfers:

a)

Only on weekdays

b)

24/7

c)

None of the above

d)

Only during bank working hours

39.

Which of the following is a type of loan?

a)

Home loan

b)

Education loan

c)

Personal loan

d)

All of the above

40.

What does the ‘time value of money’ mean?

a)

Money gains value due to interest

b)

None of the above

c)

Value of money remains constant

d)

Money loses value over time due to inflation

41.

Which term refers to short-term investments?

a)

Current account

b)

Fixed deposit account

c)

Savings account

d)

Recurring deposit account

42.

Who are the participants in the stock market using price fluctuations?

a)

Savers

b)

Investors

c)

Bankers

d)

Speculators

43.

Which bank account is used for long-term savings?

a)

Current account

b)

Savings account

c)

Fixed deposit account

d)

Checking account

44.

What is inflation?

a)

None of the above

b)

Decrease in prices

c)

Stability in prices

d)

Increase in general price level of goods and services

45.

Which insurance covers health expenses?

a)

Health insurance

b)

Property insurance

c)

Life insurance

d)

Auto insurance

46.

Money lying in a piggy bank is:

a)

Not earning interest

b)

Both B and C

c)

Earning interest

d)

Available for withdrawal

47.

What is a demand draft?

a)

A type of loan

b)

A cheque issued by an individual

c)

An electronic fund transfer

d)

A prepaid negotiable instrument issued by a bank

48.

Which inflation is caused by increase in production costs?

a)

None of the above

b)

Cost-push inflation

c)

Stagflation

d)

Demand-pull inflation

49.

What does a debit card do?

a)

None of the above

b)

Enables borrowing from a bank

c)

Allows spending money from own account

d)

Issues a loan automatically

50.

What is the main function of a bank?

a)

Store customers’ gold

b)

All of the above

c)

Store and protect customers’ money

d)

Provide legal advice

51.

What is the maximum limit for fund transfer using IMPS?

a)

5,00,000

b)

1,00,000

c)

No limit

d)

2,00,000

52.

What is cost-push inflation caused by?

a)

Decrease in money supply

b)

Increase in cost of production

c)

Increase in demand for goods

d)

Increase in taxes

53.

Which GST slab rate applies to luxury and sin goods?

a)

28%

b)

18%

c)

12%

d)

5%

54.

Who regulates financial markets in India?

a)

RBI

b)

SEBI

c)

IRDA

d)

PFRDA

55.

Which of the following is NOT a financial asset?

a)

Units of mutual funds

b)

Stamps

c)

Deposits with banks

d)

Debt securities

56.

What document is NOT required for a minor to open a Savings Account?

a)

ID proof of minor

b)

Parent’s employment certificate

c)

Photograph of minor

d)

Address proof of minor

57.

What is a mutual fund?

a)

A loan from a financial institution

b)

A pool of money from investors to invest in securities

c)

A type of bank account

d)

None of the above

58.

Difference between savings account and fixed deposit?

a)

Savings account offers higher interest

b)

Fixed deposit offers higher interest rates

c)

Savings account has a fixed term

d)

Fixed deposit has high liquidity

59.

Which goods are taxed at 0% under GST?

a)

Motor vehicles

b)

Fruits and vegetables

c)

Luxury items

d)

Electronic goods

60.

Which tax was replaced by GST?

a)

Sales Tax

b)

Income Tax

c)

Central Excise Law

d)

Property Tax

61.

Which fund transfer settles transactions in real-time?

a)

Cheque

b)

RTGS

c)

NEFT

d)

IMPS

62.

Which of the following is a stock exchange in India?

a)

NYSE

b)

NSE

c)

LSE

d)

TSE

63.

Which expense is NOT covered by Education Loan?

a)

Books and equipment

b)

Hostel fees

c)

Personal vacation expenses

d)

College fees

64.

Which is NOT a function of a bank?

a)

Providing loans

b)

Accepting deposits

c)

Printing money

d)

Offering financial advice

65.

Main purpose of GST?

a)

Increase government revenue

b)

Simplify tax structure

c)

Decrease government revenue

d)

None of the above

66.

Which of the following is a benefit of GST?

a)

Eliminates cascading effect of taxes

b)

Increases compliance

c)

Promotes ease of doing business

d)

All of the above

67.

Primary impact of inflation?

a)

Stability in interest rates

b)

Increase in interest rates

c)

None of the above

d)

Decrease in interest rates

68.

What does EMI stand for?

a)

Equated Monthly Instalment

b)

Equal Money Investment

c)

Enhanced Monthly Instalment

d)

None of the above

69.

Role of a financial market regulator?

a)

Ensure fair trading practices

b)

Protect investor interests

c)

Maintain market integrity

d)

All of the above

70.

What does NAV stand for in mutual funds?

a)

Net Asset Value

b)

National Asset Value

c)

Net Annual Value

d)

National Annual Value

71.

What should you never do with a blank cheque?

a)

Deposit it without filling in the details

b)

Write the amount first

c)

Sign it

d)

Keep it with the bank

72.

Which of the following is a direct tax?

a)

VAT

b)

Service tax

c)

Sales tax

d)

Income tax

73.

What is the future value of $100 investments made annually for 5 years at 5% interest compounded annually?

a)

$127.63

b)

$500

c)

$552.60

d)

$100

74.

Which type of inflation occurs when demand exceeds supply?

a)

Cost-push inflation

b)

Built-in inflation

c)

Demand-pull inflation

d)

None of the above

75.

A recurring deposit is typically:

a)

An investment in stocks

b)

A series of regular deposits

c)

A one-time deposit

d)

A type of loan

76.

Which type of mutual fund is considered the safest?

a)

Debt fund

b)

Sectoral fund

c)

Balanced fund

d)

Equity fund

77.

Purpose of diversification in investments?

a)

To reduce risk

b)

To increase risk

c)

None of the above

d)

To maximize returns

78.

Main purpose of a financial market?

a)

To offer loans

b)

None of the above

c)

To facilitate buying & selling of securities

d)

To provide insurance

79.

Who can operate a bank account independently (RBI guidelines)?

a)

Minors with guardian’s consent

b)

Minors above 10 years

c)

Only adults

d)

Only individuals above 18 years

80.

Formula for calculating Simple Interest?

a)

(Principal × Rate × Time) / 100

b)

Principal + Rate + Time

c)

Principal × Rate × Time

d)

(Principal + Rate + Time) / 100

81.

A fixed deposit account typically offers:

a)

No interest

b)

Higher interest rates than savings accounts

c)

Lower interest rates than savings accounts

d)

No returns

82.

Which of the following is a type of mutual fund?

a)

Close-ended fund

b)

Exchange-traded fund

c)

Open-ended fund

d)

All of the above

83.

What is a secondary market?

a)

Market where new securities are issued

b)

Market where existing securities are traded

c)

Market for commodities

d)

None of the above

84.

Primary benefit of investing in mutual funds?

a)

Diversification

b)

Guaranteed returns

c)

None of the above

d)

High returns with low risk

85.

Which of the following is a benefit of GST?

a)

Increases compliance

b)

Eliminates cascading effect of taxes

c)

Promotes ease of doing business

d)

All of the above

86.

What does a debit card do?

a)

Enables borrowing money

b)

Issues a loan automatically

c)

None of the above

d)

Allows spending money from own account

87.

What happens to investor’s money during an NFO?

a)

Used to buy individual stocks

b)

Pooled with others’ money & invested as per scheme

c)

Kept in high-interest savings account

d)

Directly invested in real estate

88.

Why prefer mutual funds over shares?

a)

Requires less time and research

b)

Guarantees higher returns

c)

Eliminates all risks

d)

Provides personal financial advice

89.

Who manages mutual fund investments?

a)

The investor

b)

The fund manager

c)

The bank

d)

The government

90.

When did GST come into effect in India?

a)

1st July 2016

b)

1st July 2017

c)

1st January 2017

d)

29th March 2017

91.

Which type of insurance includes accident and health insurance?

a)

Life Insurance

b)

Marine Insurance

c)

General Insurance

d)

Social Insurance

92.

What happens if you fail to repay a secured loan?

a)

The bank increases the interest rate

b)

The bank forgives the loan

c)

The bank may seize the collateral

d)

Nothing happens

93.

What security is required for an Education Loan above 7.5 lakhs?

a)

No security needed

b)

Only Parent/Guardian as co-borrower

c)

Tangible collateral security + Parent/Guardian as co-borrower

d)

Third-party guarantee

94.

Which of the following is considered wasteful expenditure?

a)

Spending money allocated for stationery on chocolates

b)

Saving money in a bank

c)

Paying off debt

d)

Buying necessary groceries

95.

Which type of loan is often used to buy a house?

a)

Payday loan

b)

Home loan

c)

Auto loan

d)

Personal loan

96.

Components of GST system in India?

a)

SGST, CGST, UGST

b)

IGST, CGST, IGST

c)

SGST, CGST, IGST

d)

SGST, CGST, FGST

97.

A premium in insurance refers to:

a)

Amount paid periodically to keep policy active

b)

None of the above

c)

Claim amount

d)

Total coverage amount

98.

Role of a mutual fund manager?

a)

Select securities to invest in

b)

Monitor performance of the fund

c)

Manage pool of funds

d)

All of the above

99.

What is a New Fund Offer (NFO)?

a)

A special tax on mutual funds

b)

Launch of a new mutual fund scheme

c)

A discount on mutual fund units

d)

A type of mutual fund withdrawal

100.

Primary function of SEBI?

a)

Promote corporate finance

b)

Regulate & protect investors in securities

c)

Manage government securities

d)

Provide financial education

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