Can You Ace This Financial Literacy Quiz?

In which age bracket do you belong?

• 20s
• 30s
• 40s
• 50s and above

What’s your civil status?

• Single
• Married
• Separated
• Living together

How many kids do you have?

• 0
• 1
• 2-3
• 4 and above

What's your employment status?

• Employed
• Self-employed
• Freelance
• Unemployed

What’s your job position?

• Rank and file
• Managerial/supervisory/owner
• Top level/Business owner
• Not applicable

What is the agreement that allows a borrower the capacity to withdraw cash up to an approved limit?

• Line of credit
• Mark up
• Overdrawn account
• Profit margin

What do you get when you deduct liabilities from assets, which is the worth of ownership interest?

• Fringe benefits
• Interest rate
• Equity
• Loan to value ratio

Differentiate “gross income” from “net income.”

• Gross income is the total amount earned after expenditures are deducted from the basic rate, while net income is the total amount earned before deductions.
• Net income is the total amount earned after expenditures are deducted from the basic rate, while gross income is the total amount earned before deduction.
• Gross is the income earned after government taxes.
• None of the above.

How do you compute your net worth?

• Total assets minus the total liabilities
• Total liability multiplied by total assets
• Liabilities plus assets
• Assets divided by liabilities

What do you call the asset that a lender can take from the borrower in case a loan cannot be repaid?

• Debit
• Repossessed asset
• Overdraft facility
• Collateral

Suppose you have a cash in hand that you want to grow for a term that you will use in the future. However, you are risk-averse. What is the smartest thing to do?

• I’ll save my money in a piggy bank in the meantime.
• I’ll lend my money to an investor.
• I’ll buy gold or a property.
• I’ll put it in a time deposit account.

What does ROI stand for?

• Return on Investment
• Restriction of Inventory
• Risk of Investor
• Fully drawn advance

What is the exact period that covers a current asset?

• Next 6 months
• Next 3 months
• Next month
• Next 12 months

Suppose you have several loans and debts. What do you do to get lower interest rates?

• Depreciation
• Debt consolidation
• Equity finance
• Fully drawn advance

Net worth, shareholder’s equity, and owner’s equity are synonymous with the term _________.

• Margin call
• Net assets
• Profit margin
• Return on investment

When filing for an insurance claim, under which policy do floods and typhoons fall?

• Third-party liability
• Bodily injury
• Acts of Nature
• Property damage

You need to settle a debt from one bank to another. However, you do not have a checking account. What method should you use to transact?

• Credit transfer
• Direct debit
• Money order
• Promissory note

What is the most accurate description of amortization?

• Recording of long-term payments from customers
• A lump-sum payment
• Cost allocation of an intangible asset over a period of time
• Daily record of all transactions

In layman’s terms, rebate simply means _____________.

• Partial refund
• Credit
• Return on investment
• Profit

Which of the following can hurt your credit rating?

• Consistently late payments on loans and debts
• Moving from one address to another in a span of a few months
• Maxing out your credit card
• All of the above

What are the best examples of capital expenditures?

• Licensing fees, raw materials, property taxes
• Software, buildings, furniture and fixtures, office and computer equipment
• Salaries and allowances
• All of the above

Rent, salaries, depreciation, and interest expense are best examples of ____________.

• Fixed costs
• Variable costs
• Money market funds
• Negotiable costs

Which type of mutual fund investment is most suitable for low-risk investors?

• Bond funds
• Balanced funds
• Money market funds
• Equity funds

Which best describes a long-term investment?

• Amounts invested for more than one year
• An excess fund intended for investment to maximize the earning potential of a time deposit account
• Money Five-year, tax-free time deposits that are offered in most banks
• All of the above

In investing, what does liquidity mean?

• The ability to convert an investment portfolio to cash without a drastic loss in value
• Taking a person or property into custody by due process
• The sum of money an aggrieved party is entitled to get in case of breach of contract
• An itemized list of tangible goods and intangible qualities

What affects the amount of interest that you would pay on a loan?

• The amount borrowed
• The payment term
• Your credit rating
• All of the above

You scored {0}/21 in eCompareMo.com’s financial literacy test!