QP CODE: 24900057

SERIES: A Reg No:....................

Name:.......................

MAHATMA GANDHI UNIVERSITY, KOTTAYAM

FIRST SEMESTER MGU-UGP (HONOURS) REGULAR EXAMINATION

NOVEMBER 2024
First Semester

Discipline Specific Core Course - MG1DSCCOM100 - BASIC FINANCE FOR DAILY

LIFE

(2024 ADMISSION ONWARDS)

Duration: 1 Hours Maximum Marks: 70

Remember (K), Understand (U), Apply (A), Analyse (An), Evaluate (E), Create (C), Interest (I),
Appreciation (Ap), and Skill (S)

Students should attempt atleast one question from each course outcome to enhance their overall outcome
attainability.

[Learning Domain][CO No(s)]

Part A
Multiple Choice Questions
Attempt any 20 questions.
Each question carries 1 mark
1 What best defines money attitude? [K] [3]

a) The amount of money one has b) A person's beliefs and feelings

about money

c) The ability to save money d) The knowledge of financial

products

2 __________ finance involves managing the financial activities of [U] [1]

governments and public institutions.

a) Social b) Business

c) Public d) Personal

3 How long is the typical duration of a general insurance policy? [K] [2, 3]

1
 a) 1 year b) 5 years

c) 10 years d) Indefinite

4 What is a secured loan? [U] [2, 3]

a) A loan with a fixed interest rate b) A loan backed by collateral

c) A loan offered by the d) A loan without interest

government

5 Financial Literacy helps individuals to____________ [U] [1]

a) Avoid all expenses b) Spend without planning

c) Manage Personal finances d) Ignore financial goals

6 What is the primary purpose of the money market? [K] [3]

a) Long-term financing b) Short-term borrowing and
lending

c) Equity investment d) Real estate trading

7 Which of the following describes a blockchain? [An] [3]

a) A type of software b) A decentralised ledger

technology.

c) A mobile app d) A bank account

8 Diversification in investing helps to: [K] [1]

a) Eliminate all financial risk b) Maximize short-term gains

c) Spread risk across different d) Increase spending on luxury

assets items

9 An example for good financial behavior [U] [1]

a) Having a realistic saving plan b) Accumulating credit card debt

c) Spending more than Income d) Neglecting Savings

10 Inflation leads to: [U] [2]

a) Interest rate risk b) Credit risk

c) Default risk d) Purchasing power risk

11 Compound interest earned on an investment may also be claculated using [U] [2]
the given equation, if F is future value and P is present value

a) F+P b) F-P

c) P-F d) (P-F)(1-r)

2
12 The fee charged by the lender to take care of paper works as part of loan [U] [2, 3]
processing
a) Pre-closure fees b) Processing fees

c) Closing fees d) All of the above

13 Pure insurance is primarily aimed at: [U] [2, 3]

a) Wealth generation b) Business investment

c) Retirement savings d) Financial protection

14 Who is a credit defaulter? [K] [4]

a) A person who fails to pay EMI. b) A person who promptly plan

credit.

c) A person who have high CIBIL d) A person who take frequent

Score. loans.

15 Financial ethics incorporates the following factors [An] [1, 4]

(i) Honesty (ii) Justice (iii) Fairness (iv) Sense of Humour

a) i, ii and iv b) i, iii and iv

c) ii, iii and iv d) i, ii and iii

16 MUDRA Yojana scheme is launched in [K] [5]

a) 2014 b) 2015

c) 2002 d) 2020

17 The primary objective of Jan Dhan Yojana is [U] [5]

a) Financial inclusion b) Financial support to micro

companies

c) Provide educational loans d) Promote harmony

18 Which of the following statements about interest rates is true? [U] [1]

a) Interest rates only apply to b) Interest rates are the same for
loans, not savings accounts every bank

c) High-interest rates on loans d) Interest rates do not affect

mean you pay more over time monthly payments

19 Financial socialization primarily occurs through: [K] [1]

a) School education b) Social media

3
 c) Family, peers, and institutions d) Government policies

20 What does market volatility refer to? [U] [3]

a) Consistent prices b) Guaranteed returns

c) Fluctuations in investment d) Low risk

prices

21 Which of the following best describes a budget? [A] [4]

a) A type of financial statement b) A list of expenses

c) A detailed plan for spending d) A loan agreement

and saving money

22 An aggressive investor is likely to: [U] [4]

a) Avoid the stock market b) Focus solely on savings

accounts

c) Seek high returns despite risks d) Minimize exposure to all

investments

(20 × 1 = 20)

Part B
Multiple Choice Questions
Answer any 25 questions.
Each question carries 2 marks
23 In the context of financial literacy, tracking expenses helps to [U] [1]
_____________

a) Increased debt b) Understanding spending

patterns

c) Ignore financial goals d) Reduce savings

24 Which of the following is NOT a decision affected by financial literacy? [U] [1]

a) Understanding credit card b) Deciding on investments for

interest rates retirement

c) Choosing a new hobby d) Evaluating insurance policies

25 Two stocks have the following returns over the past five years: Stock A: [U] [1]
8%, 5%, 12%, 10%, 9%, and Stock B: 6%, 5%, 7%, 6%, 8%. If an investor
seeks stability, which stock would be the better choice, and why?

a) Stock A, because it has higher b) Stock A, because it has lower

returns. volatility.

c) Stock B, because it has higher d) Stock B, because it has less

4
 average returns. volatility.

26 When assessing the adequacy of life insurance, a policyholder should [A] [2, 3]
consider their ______ needs, such as outstanding loans and living expenses,
to ensure dependents are financially secure. This process is often called a
______ analysis.

a) financial; needs b) future; liability

c) immediate; coverage d) luxury; risk

27 Assertion (A): Investments are primarily for wealth accumulation, while [An] [2, 3]
insurance is focused on providing a safety net for risks.
Reason (R): An insurance policy guarantees a return on investment after a
specific period.

a) Both A and R are true, and R is b) Both A and R are true, but R is
the correct explanation of A. not the correct explanation of
A.

c) A is true, but R is false. d) A is false, but R is true.

28 Which of the following statement is/are true? i)A positive attitude can [A] [3]
enhance an individual's decision-making ability. ii)Negative attitudes do
not influence the quality of decisions made. iii)Attitudes formed through
experience are less influential than those formed through social norms.
iv)Emotional intelligence is unrelated to effective decision-making.

a) i&ii b) ii & iii

c) i only d) iii only

29 A borrower is given two loan options: 7% for 4 years or 5% for 5 years, [A] [3]
both using simple interest.In which option will he have to repay more?

a) 7% for 4 years b) 5% for 5 years

c) Both will generate the same d) Cannot determine

interest

30 What is the primary purpose of peer-to-peer (P2P) lending platforms? [An] [3]

a) To provide loans exclusively to b) To connect borrowers directly

businesses. with investors without
traditional banks.

c) To offer savings accounts with d) To eliminate all loan risks for

high interest rates. borrowers.

31 What is liquidity risk? [An] [2, 3]

a) Risk of being unable to sell an b)

investment quickly without a Risk of losing value due to
loss inflation

5
 c) Risk of poor management in a d) Risk of changing interest rates
company

32 Calculate future value of Ms. Tiya's investment amounting to Rs. 10,000 [A] [2]
for three years at an annual compound interest rate of 9 %.

a) 13,048 b) 2,700

c) 12,950 d) 12,700

33 Mr. Alex has an investment bearing 12 % interest rate compounded [A] [2]
semi-annually. Calculate the effective interest rate earned by him.

a) 12.36 b) 11.236

c) 12.55 d) 10.25

34 Credit management involves ____________________ [U] [1]

a) Managing savings and b) Investing in stocks only

emergency funds

c) Spending money without any d) Understanding how to use

credit limit credit responsibly, including
credit scores and interest rates

35 Assertion (A): Media and advertising have no role in financial [U] [1]
socialization.
Reason (R): Media content only influences consumption choices, not
financial knowledge.

a) Both A and R are true, and R is b) Both A and R are true, but R
the correct explanation of A. is not the correct explanation
of A.

c) A is true, but R is false. d) A is false, but R is true.

36 Assertion (A): Gender can influence financial socialization. [U] [1]

Reason (R): Men and women are often socialized with similar financial
behaviors and responsibilities.

a) Both A and R are true, and R is b) Both A and R are true, but R
the correct explanation of A. is not the correct explanation
of A.

c) A is true, but R is false. d) A is false, but R is true.

37 Credit behaviour includes [K] [4]

(i) Borrowing habits (ii) Repayment History
(iii) Guidance on investments

a) All of the above b) i and ii

6
 c) i and iii d) ii and iii

38 Mr.J holds a credit card of Bank ABC with Rs.15,000 limit and has a balance [An] [4]
of Rs. 7,500.
Therefore what is the credit utilisation ratio of Mr.Joshin is?

a) 50% b) 25%

c) 75% d) 60%

39 Identify the correct statement(s): [U] [5]

i. A minor can open a current account.
ii. Current accounts are available only in scheduled banks.
iii. Current accounts allow regular transactions.
iv. Current accounts offer better interest rates.

a) Only iii is correct b) ii,iii and iv are correct

c) Only ii is correct d) i and iv are correct

40 In a motor insurance policy, a ___________ covers both third-party [U] [5]

liability and damages to the insured car, while a ___________ only covers
third-party damages.

a) cover policy and third party b) comprehensive policy and

policy third party policy

c) cover policy and third liability d) comprehensive policy and

policy showroom policy

41 Match the Types of Financial Goals with their Time Horizons: [An] [5]
1. Short-Term Goals a. 5 years or longer
2. Medium-Term Goals b. Less than 1 year
3. Long-Term Goals c. 1 to 5 years
4. Immediate Goals d. Daily or weekly

a) 1 - a, 2 - b, 3 - c, 4 - d b) 1 - b, 2 - c, 3 –a,4-d

c) 1 - b, 2 - c, 3 - a, 4 - d d) 1 - c, 2 - a, 3 – d,4-b

42 Which of the following factors primarily contributes to investment inertia? [U] [4]

a) High inflation rates b) Familiarity with new financial

products

c) Immediate need for returns d) Lack of knowledge and

confidence in investing

43 Financial literacy includes understanding the difference between ________ [U] [1]
and ________.

a) Credit; debt b) Savings; expenses

c) Needs; wants d) Assets; liabilities

7
44 If a person’s income or ______ obligations increase significantly, they may [A] [2, 3]
need to ______ their insurance coverage to maintain adequate protection.

a) family; reduce b) debt; upgrade

c) personal; cancel d) investment; reassess

45 ______ insurance provides a sum assured only upon the policyholder’s [U] [2, 3]
death, whereas ______ insurance provides a payout at the end of the policy
term or on the policyholder’s death, whichever is earlier.

a) Health;Life b) Pure;Unit linked

c) Endowment;Pure d) Pure;Endowment

46 A sum of Rs.5,000 is invested at a 4% simple interest rate for 3 years. What [A] [3]
is the total amount after 3 years?

a) Rs.5,600 b) Rs.5,500

c) Rs.6,000 d) Rs.5,800

47 What is crowdfunding? [K] [3]

a) A way to borrow money from b) Collecting small amounts of

banks money from many people to
fund a project

c) A type of insurance d) A personal loan

48 From the following list, select types of instalment credit. [E] [4]
(i) Student Loan (ii) Personal Loan (iii) Overdraft
(iv) Credit Cards (v) Mortgage Loans

a) i, ii and v b) i, ii and iii

c) i, iii and v d) i, iv and v

49 How does lack of financial knowledge contribute to investment inertia? [U] [4]

a) It encourages regular investment b) It enhances portfolio

changes. diversification.

c) It ensures immediate adjustment d) It may lead to indecision,

to market changes. causing reluctance to modify
investments
(25 × 2 = 50)

END OF THE QUESTION PAPER

***

8
QP CODE: 24900057
SERIES: B Reg No:....................

Name:.......................

MAHATMA GANDHI UNIVERSITY, KOTTAYAM

FIRST SEMESTER MGU-UGP (HONOURS) REGULAR

EXAMINATION NOVEMBER 2024
First Semester

Discipline Specific Core Course - MG1DSCCOM100 - BASIC FINANCE FOR DAILY

LIFE

(2024 ADMISSION ONWARDS)

Duration: 1 Hours Maximum Marks: 70

Remember (K), Understand (U), Apply (A), Analyse (An), Evaluate (E), Create (C), Interest (I),
Appreciation (Ap), and Skill (S)

Students should attempt atleast one question from each course outcome to enhance their overall
outcome attainability.

[Learning Domain][CO No(s)]

Part A
Multiple Choice Questions
Attempt any 20 questions.
Each question carries 1 mark
1 Which of the following statements about interest rates is true? [U] [1]

a) Interest rates are the same for b) Interest rates only apply to
every bank loans, not savings accounts

c) Interest rates do not affect d) High-interest rates on loans

monthly payments mean you pay more over time

2 The primary objective of Jan Dhan Yojana is [U] [5]

a) Promote harmony b) Financial inclusion

c) Provide educational loans d) Financial support to micro

companies

3 An aggressive investor is likely to: [U] [4]

1
 a) Avoid the stock market b) Minimize exposure to all
investments

c) Seek high returns despite risks d) Focus solely on savings

accounts

4 Pure insurance is primarily aimed at: [U] [2, 3]

a) Wealth generation b) Financial protection

c) Retirement savings d) Business investment

5 __________ finance involves managing the financial activities of [U] [1]

governments and public institutions.

a) Public b) Social

c) Personal d) Business

6 Who is a credit defaulter? [K] [4]

a) A person who have high CIBIL b) A person who promptly plan

Score. credit.

c) A person who take frequent d) A person who fails to pay EMI.

loans.

7 What best defines money attitude? [K] [3]

a) A person's beliefs and feelings b) The knowledge of financial

about money products

c) The amount of money one has d) The ability to save money

8 How long is the typical duration of a general insurance policy? [K] [2, 3]

a) Indefinite b) 1 year

c) 5 years d) 10 years

9 Diversification in investing helps to: [K] [1]

a) Spread risk across different b) Maximize short-term gains

assets

c) Eliminate all financial risk d) Increase spending on luxury

items

10 The fee charged by the lender to take care of paper works as part of loan [U] [2, 3]
processing

a) Pre-closure fees b) Processing fees

2
 c) Closing fees d) All of the above

11 What does market volatility refer to? [U] [3]

a) Guaranteed returns b) Fluctuations in investment

prices

c) Low risk d) Consistent prices

12 Financial Literacy helps individuals to____________ [U] [1]

a) Avoid all expenses b) Spend without planning

c) Ignore financial goals d) Manage Personal finances

13 Financial ethics incorporates the following factors [An] [1, 4]

(i) Honesty (ii) Justice (iii) Fairness (iv) Sense of Humour

a) ii, iii and iv b) i, ii and iv

c) i, iii and iv d) i, ii and iii

14 Financial socialization primarily occurs through: [K] [1]

a) Social media b) Government policies

c) Family, peers, and institutions d) School education

15 Which of the following best describes a budget? [A] [4]

a) A loan agreement b) A detailed plan for spending

and saving money

c) A list of expenses d) A type of financial statement

16 Inflation leads to: [U] [2]

a) Purchasing power risk b) Default risk

c) Credit risk d) Interest rate risk

17 Compound interest earned on an investment may also be claculated using [U] [2]
the given equation, if F is future value and P is present value

a) F+P b) (P-F)(1-r)

c) P-F d) F-P

18 An example for good financial behavior [U] [1]

a) Having a realistic saving plan b) Accumulating credit card debt

c) Spending more than Income d) Neglecting Savings

3
19 What is the primary purpose of the money market? [K] [3]
a) Equity investment b) Long-term financing

c) Short-term borrowing and d) Real estate trading

lending

20 What is a secured loan? [U] [2, 3]

a) A loan without interest b) A loan with a fixed interest
rate

c) A loan offered by the d) A loan backed by collateral

government

21 MUDRA Yojana scheme is launched in [K] [5]

a) 2020 b) 2015

c) 2014 d) 2002

22 Which of the following describes a blockchain? [An] [3]

a) A bank account b) A type of software

c) A mobile app d) A decentralised ledger

technology.

(20 × 1 = 20)

Part B
Multiple Choice Questions
Answer any 25 questions.
Each question carries 2 marks
23 Which of the following is NOT a decision affected by financial literacy? [U] [1]
a) Choosing a new hobby b) Understanding credit card
interest rates

c) Deciding on investments for d) Evaluating insurance policies

retirement

24 What is the primary purpose of peer-to-peer (P2P) lending platforms? [An] [3]
a) To connect borrowers directly b) To eliminate all loan risks for
with investors without borrowers.
traditional banks.

c) To offer savings accounts with d) To provide loans exclusively

high interest rates. to businesses.

25 If a person’s income or ______ obligations increase significantly, they may [A] [2, 3]
need to ______ their insurance coverage to maintain adequate protection.

a) debt; upgrade b) family; reduce

c) personal; cancel d) investment; reassess

4
26 Assertion (A): Investments are primarily for wealth accumulation, while [An] [2, 3]
insurance is focused on providing a safety net for risks.
Reason (R): An insurance policy guarantees a return on investment after a
specific period.

a) Both A and R are true, but R is b) Both A and R are true, and R
not the correct explanation of A. is the correct explanation of A.

c) A is false, but R is true. d) A is true, but R is false.

27 Mr. Alex has an investment bearing 12 % interest rate compounded semi- [A] [2]
annually. Calculate the effective interest rate earned by him.
a) 11.236 b) 12.55

c) 10.25 d) 12.36

28 Assertion (A): Media and advertising have no role in financial [U] [1]
socialization.
Reason (R): Media content only influences consumption choices, not
financial knowledge.

a) A is false, but R is true. b) A is true, but R is false.

c) Both A and R are true, but R is d) Both A and R are true, and R
not the correct explanation of A. is the correct explanation of A.

29 Credit behaviour includes [K] [4]

(i) Borrowing habits (ii) Repayment History
(iii) Guidance on investments

a) i and ii b) ii and iii

c) All of the above d) i and iii

30 Match the Types of Financial Goals with their Time Horizons: [An] [5]
1. Short-Term Goals a. 5 years or longer
2. Medium-Term Goals b. Less than 1 year
3. Long-Term Goals c. 1 to 5 years
4. Immediate Goals d. Daily or weekly

a) 1 - b, 2 - c, 3 - a, 4 - d b) 1 - c, 2 - a, 3 – d,4-b

c) 1 - b, 2 - c, 3 –a,4-d d) 1 - a, 2 - b, 3 - c, 4 - d

31 Identify the correct statement(s): [U] [5]

i. A minor can open a current account.
ii. Current accounts are available only in scheduled banks.
iii. Current accounts allow regular transactions.
iv. Current accounts offer better interest rates.

a) Only ii is correct b) Only iii is correct

5
 c) ii,iii and iv are correct d) i and iv are correct

32 Two stocks have the following returns over the past five years: Stock A: [U] [1]
8%, 5%, 12%, 10%, 9%, and Stock B: 6%, 5%, 7%, 6%, 8%. If an investor
seeks stability, which stock would be the better choice, and why?

a) Stock B, because it has less b) Stock A, because it has higher

volatility. returns.

c) Stock A, because it has lower d) Stock B, because it has higher

volatility. average returns.

33 Financial literacy includes understanding the difference between ________ [U] [1]
and ________.

a) Needs; wants b) Credit; debt

c) Assets; liabilities d) Savings; expenses

34 Mr.J holds a credit card of Bank ABC with Rs.15,000 limit and has a balance [An] [4]
of Rs. 7,500.
Therefore what is the credit utilisation ratio of Mr.Joshin is

a) 60% b) 50%

c) 25% d) 75%

35 A borrower is given two loan options: 7% for 4 years or 5% for 5 years, [A] [3]
both using simple interest.In which option will he have to repay more?

a) 7% for 4 years b) Both will generate the same

interest

c) Cannot determine d) 5% for 5 years

36 Credit management involves ____________________ [U] [1]

a) Spending money without any b) Understanding how to use
credit limit credit responsibly, including
credit scores and interest rates

c) Investing in stocks only d) Managing savings and

emergency funds

37 In a motor insurance policy, a ___________ covers both third-party liability [U] [5]
and damages to the insured car, while a ___________ only covers
third-party damages.

a) comprehensive policy and third b) cover policy and third liability

party policy policy

c) cover policy and third party d) comprehensive policy and

policy showroom policy

38 In the context of financial literacy, tracking expenses helps to [U] [1]

6
 _____________

a) Increased debt b) Ignore financial goals

c) Understanding spending patterns d) Reduce savings

39 ______ insurance provides a sum assured only upon the policyholder’s [U] [2, 3]
death, whereas ______ insurance provides a payout at the end of the policy
term or on the policyholder’s death, whichever is earlier.

a) b) Pure;Unit linked
Pure;Endowment
c) Endowment;Pure d) Health;Life

40 Assertion (A): Gender can influence financial socialization. [U] [1]

Reason (R): Men and women are often socialized with similar financial
behaviors and responsibilities.

a) Both A and R are true, and R is b) A is true, but R is false.

the correct explanation of A.

c) Both A and R are true, but R is d) A is false, but R is true.

not the correct explanation of A.

41 Calculate future value of Ms. Tiya's investment amounting to Rs. 10,000 [A] [2]
for three years at an annual compound interest rate of 9 %.

a) 12,700 b) 2,700

c) 13,048 d) 12,950

42 A sum of Rs.5,000 is invested at a 4% simple interest rate for 3 years. What [A] [3]
is the total amount after 3 years?

a) Rs.5,800 b) Rs.5,500

c) Rs.6,000 d) Rs.5,600

43 What is crowdfunding? [K] [3]

a) A type of insurance b) A personal loan

c) Collecting small amounts of d) A way to borrow money from

money from many people to banks
fund a project

44 Which of the following statement is/are true? i)A positive attitude can [A] [3]
enhance an individual's decision-making ability. ii)Negative attitudes do not
influence the quality of decisions made. iii)Attitudes formed through
experience are less influential than those formed through social norms.
iv)Emotional intelligence is unrelated to effective decision-making.

a) iii only b) i&ii

7
 c) i only d) ii & iii

45 Which of the following factors primarily contributes to investment inertia? [U] [4]
a) Immediate need for returns b) Lack of knowledge and
confidence in investing

c) High inflation rates d) Familiarity with new financial

products

46 What is liquidity risk? [An] [2, 3]

a) Risk of changing interest rates b) Risk of being unable to sell an
investment quickly without a
loss

c) Risk of losing value due to d) Risk of poor management in a

inflation company

47 When assessing the adequacy of life insurance, a policyholder should [A] [2, 3]
consider their ______ needs, such as outstanding loans and living expenses,
to ensure dependents are financially secure. This process is often called a
______ analysis.

a) financial; needs b) luxury; risk

c) immediate; coverage d) future; liability

48 How does lack of financial knowledge contribute to investment inertia? [U] [4]
a) It enhances portfolio b) It may lead to indecision,
diversification. causing reluctance to modify
investments.

c) It ensures immediate adjustment d) It encourages regular

to market changes. investment changes.

49 From the following list, select types of instalment credit. [E] [4]
(i) Student Loan (ii)Personal Loan (iii) Overdraft
(iv) Credit Cards (v)Mortgage Loans

a) i, iii and v b) i, ii and iii

c) i, ii and v d) i, iv and v

(25 × 2 = 50)

END OF THE QUESTION PAPER

***