Personal Finance Quiz

Answer 10 questions and get a certificate

How does the Annual Percentage Rate (APR) on a loan differ from the nominal interest rate?

APR includes processing fees, insurance charges, and other mandatory costs to show the true annualised borrowing cost

APR excludes processing fees and only reflects the pure interest cost

In India, the APR is always exactly the same as the nominal interest rate

None

In a health insurance policy, the “waiting period” refers to:

A specified duration during which certain conditions (like pre-existing diseases) are not covered

The time taken by the insurer to process and reimburse a claim

The period between policy expiry and renewal without losing continuity benefits

None

In India’s personal income tax framework, the new tax regime (section 115BAC) generally offers:

Lower headline tax rates but restricts most exemptions and deductions

Higher tax rates with full availability of deductions like 80C, HRA, and 80D

A flat tax rate irrespective of income slab

None

The power of compounding is best described as:

Earning a fixed percentage of interest every year only on the original amount invested

Earning interest on both the initial principal and the interest accumulated in previous periods

A guaranteed high return that comes from investing in equity mutual funds

None

Which of the following is generally considered an example of “good debt”?

A credit card used to fund a luxury vacation

A personal loan to buy a high-end smartphone

A home loan to acquire an appreciating asset

None

A CIBIL credit score in India is primarily based on:

Your annual income, employment stability, and educational qualifications

The total value of your fixed deposits and mutual fund holdings

Your past credit behaviour, repayment history, and outstanding debt

None

In personal budgeting, what does the “pay yourself first” strategy advocate?

Cover all necessary expenses first, then save whatever remains

Allocate a fixed portion of income to savings and investments before spending on wants or even needs

Split income equally between current expenditure and future goals

None

What is the primary advantage of a fixed deposit (FD) laddering strategy?

It guarantees the highest interest rate across all deposits simultaneously

It spreads maturity dates, improving liquidity and helping manage reinvestment risk

It eliminates income tax on all interest earned from bank deposits

None

The idea of “gold as a safe haven” in a personal portfolio means:

The price of gold never falls during market corrections

Gold tends to hold its value or appreciate when stock markets are under stress or inflation rises

Gold provides a fixed and regular income stream

None

10.

The primary purpose of a will in personal finance is to:

Reduce the income tax liability of the legal heirs

Guarantee that the estate will not go through any legal process such as probate

Clearly state how a person’s assets should be distributed after death and who will care for minor dependents

None

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