Finance Quiz Leave a Comment / By Hasnain Aslam / January 27, 2025 Welcome to the Finance Quiz! Test your knowledge of personal finance, investing, and money management. Each question is designed to challenge your understanding and help you learn. Good luck and have fun!What does the '50/30/20 rule' refer to in personal finance?Deselect Answer A) Save 50%, Spend 50%. B) Needs 50%, Wants 30%, Savings 20%. C) Invest 50%, Save 50%. D) Spend 50%, Donate 50%. None HintWhat is compound interest?Deselect Answer A) Interest earned only on the initial principal. B) Interest earned after paying taxes. C) Interest earned on both the principal and previously earned interest. D) Interest charged on loans. None HintWhich of the following is a liability?Deselect Answer A) Your savings account. B) A mortgage. C) A stock portfolio. D) A piece of real estate. None HintWhat does a credit score measure?Deselect Answer A) Your ability to repay loans. B) Your wealth. C) Your monthly expenses. D) Your tax liabilities. None HintWhat is the purpose of a 401(k) plan in the U.S.?Deselect Answer S) To save for retirement. B) To save for college. C) To buy a home. D) To start a business. None HintWhat is the purpose of an emergency fund?Deselect Answer A) To invest in stocks. To cover unexpected expenses. C) To buy luxury goods. D) To pay for vacations. None HintWhich of these is considered a diversified investment?Deselect Answer A) Investing in a single stock. B) Putting all money in savings. C) Buying cryptocurrency only. D) Investing in an index fund. None HintWhat is an example of a fixed expense?Deselect Answer A) Netflix subscription. B) Groceries. C) Electricity bill. D) Dining out. None HintWhat is the primary purpose of a budget?Deselect Answer A) To control spending and manage savings. B) To maximize credit card usage. C) To calculate taxes. D) To predict stock market trends. None HintWhat does ROI stand for in finance?Deselect Answer A) Rate of Inflation. B) Revenue over Income. C) Risk of Investment. D) Return on Investment. None HintWhich financial instrument is considered the safest investment?Deselect Answer A) Corporate stocks. B) Treasury bonds. C) Cryptocurrencies. D) Real estate investments. None HintWhat is the purpose of a financial emergency fund?Deselect Answer A) To invest in stocks. B) To cover unexpected expenses. C) To pay for planned vacations. D) To earn interest. None HintWhat is the most liquid asset?Deselect Answer A) Real estate. B) Gold. C) Cash. D) Stocks. None HintWhat does diversification in investing achieve?Deselect Answer A) Reduces risk. B) Guarantees higher returns. C) Eliminates all losses. D) Maximizes profits. None HintWhich of the following is an example of an asset?Deselect Answer A) A car loan. B) A mortgage. C) Credit card debt. D) A savings account. None HintWhich of these is a fixed expense?Deselect Answer A) Groceries. B) Rent. C) Utility bills. D) Entertainment. None HintWhich of these is a tax-advantaged account?Deselect Answer A) Roth IRA. B) Checking account. C) Money market account. D) Credit card account. None HintWhat is APR in credit terms?Deselect Answer A) Annual Percentage Rate. B) Average Payment Rate. C) Automated Payment Rollout. D) Annual Principal Ratio. None HintWhich of the following is an example of passive income?Deselect Answer A) Salary from a job. B) Rental income. C) Freelance income. D) Income from overtime. None HintWhat is the ideal debt-to-income ratio for healthy finances?Deselect Answer A) Below 30%. B) 50%. C) 70%. D) 90%. None Hint 1 out of 4 Let us know your thoughts! Share your feedback, what you learned, or any questions you might have about the quiz. "Congratulations on completing the Finance Quiz! We hope you enjoyed testing your financial knowledge. Keep learning and improving your skills. Share your score with your friends and challenge them to beat it! Time's up