Financial Literacy- Personal Finance Quiz

15 Questions | Total Attempts: 31

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Financial Literacy- Personal Finance Quiz

Managing your money in terms of budgeting, saving as well as investment is called personal finance. Financial literacy is the understanding and effective use of all of this. So, what do you know about finance? If you have a good understanding of it, can you pass this quiz?


Questions and Answers
  • 1. 
    Which of the following economic trends affect personal financial planning?
    • A. 

      Inflation rate

    • B. 

      Employment

    • C. 

      Fiscal policy

    • D. 

      Volatility in financial markets

    • E. 

      All of the above

  • 2. 
    Which of the following is NOT a major financial planning area?
    • A. 

      Tax

    • B. 

      Retirement

    • C. 

      Processing information

    • D. 

      Investments

  • 3. 
    Which of the following are NOT steps of the financial planning process?
    • A. 

      Setting objectives and Review them

    • B. 

      Research Investment Options

    • C. 

      Measuring ones' financial position

    • D. 

      Set new goals every 6 months

  • 4. 
    Retirement planning should be a component of financial planning:
    • A. 

      From as early as possible

    • B. 

      Only in the months prior to retirement

    • C. 

      30 years prior to retirement for men and 25 for women

    • D. 

      No need as welfare will take care of it

  • 5. 
    The UK inflation rate is measured by which of the following averages:
    • A. 

      RPI

    • B. 

      CPIH

    • C. 

      DPI

    • D. 

      GDP

    • E. 

      None of the above

  • 6. 
    Nominal Interest rates are:
    • A. 

      Always less than Real Interest rates

    • B. 

      The same as Real Interest rates when inflation is zero

    • C. 

      Unrelated to Real Interest rates

    • D. 

      Always the same as Inflation rates

  • 7. 
    APR is...
    • A. 

      The annual percentage rate applied to deposits or loans

    • B. 

      The semi annual coupon rate of a bond

    • C. 

      The rate borrowers always pay on their loans

    • D. 

      The rate of inflation

  • 8. 
    Over the last year the household saving rate has...
    • A. 

      Increased across all households in UK

    • B. 

      Decreased across all households

    • C. 

      Remained stable in the UK

    • D. 

      Increased amongst the richest households, decreased amongst the poorest households

  • 9. 
    The FSCS...
    • A. 

      Eliminates all risks of savings

    • B. 

      Is backed by Governments in case of default of financial providers

    • C. 

      Eliminates inflation risk

    • D. 

      Only applies to wealthy savers

  • 10. 
    Trading on margin means...
    • A. 

      Trading bonds at their bid prices

    • B. 

      Trading stocks using debt to enhance returns

    • C. 

      Trading stocks with a high margin of volatility

    • D. 

      Trading on behalf of someone else

  • 11. 
    The bid and ask spread is applied by...
    • A. 

      Intermediaries only to bonds

    • B. 

      Insurance companies to equity and derivatives

    • C. 

      Market makers

    • D. 

      All intermediaries on small stocks

  • 12. 
    Short selling means...
    • A. 

      Selling stocks on derivatives

    • B. 

      Selling assets that ones owns

    • C. 

      Not selling at all

    • D. 

      Selling assets that one doesn't own

  • 13. 
    Value stocks are...
    • A. 

      Stocks that never pay dividends

    • B. 

      Stocks that are temporarily undervalued

    • C. 

      Stocks that are not liquid

    • D. 

      Stocks for which the growth rate is at least 3 times that of the average stock

  • 14. 
    Mutual Funds are...
    • A. 

      Open end Investment Funds

    • B. 

      Closed end Investment funds

    • C. 

      Funds aiming at providing members with retirement income

    • D. 

      Listed in the stock market

  • 15. 
    Closed end funds...
    • A. 

      Never take on debt

    • B. 

      Can take on significant debt to increase the size of the portfolio

    • C. 

      Always provide positive return

    • D. 

      Are covered by the FSCS for any investment loss

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