Sample Book

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 National Finance Olympiad

Table of Contents
1. Money 2
• History of money 2
• Forms of money 6
• Currencies 9

2. Banking 13
• Working of banks 13
• Current vs Savings account 16
• KYC 20

3. Financial planning 23
• Savings & Goal Setting 23
• Budgeting & Emergency Funds 27
• Inflation 32

4. Investing 35
• Investments 35
• Types of Investment 37
• Mutual Funds 40

5. Loans & Credits 42

• What are loans? 42
• What is credit? 44
• Different types of loan 47

6. Our mentors 50

Disclaimer
The material provided herein is solely for informational purposes and does not constitute an
endorsement, recommendation, or solicitation of any kind. It is not intended to be financial advice
and should not be relied upon as such. The rates and examples presented are representative of a
particular date and are subject to change based on general market fluctuations. Furthermore, the
rules mentioned in the document are not absolute and may differ based on circumstances. The user
acknowledges and agrees that they will not hold liable the provider of this information for any errors,
inaccuracies, or omissions in the information provided. Please refer to your financial advisor before
taking any financial decisions.

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1. Money
History of money
Humans have been using money for 4. Stone disks: On the island of Yap
a long time, but it didn't always look in the Pacific Ocean, people used
like the paper bills and coins we use large stone disks called "Rai" as
today. Back in ancient times, people money. These disks could be up
used all kinds of things to trade with to 12 feet in diameter and weigh
each other. Here are some examples: several tons!

1. Shells: In some parts of the world, Eventually, people started using metal
people used shells as currency. coins as money. The first coins were
Cowrie shells, for example, were made in ancient Greece around 600
used in Africa and Asia as money BC. They were made of gold, silver,
for hundreds of years. and copper and had pictures of gods
and goddesses on them. Later, paper
2. Salt: In ancient Rome, soldiers money was invented in China. The
were sometimes paid in salt. This paper money was much lighter and
is where we get the expression easier to carry than metal coins, so it
"worth your salt." became popular quickly. Today, most
of us use paper bills and coins as
3. Cows: In parts of Africa, cows money. But we also use credit cards,
were (and still are!) used as debit cards, and digital payments like
currency. The more cows you had, Paytm. Who knows what we'll be using
the richer you were. as money in the future!

Quick look

• The earliest forms of money were likely objects like shells, beads, or
stones used for bartering and trading.
• Metal coins were first used in ancient Greece around 600 BC, and
were made of gold, silver, and copper.
• Paper money was first invented in China in the 7th century, and was
initially printed on paper made from mulberry trees.
• The concept of banking emerged in medieval Europe, with the
establishment of banks that offered loans and facilitated trade.
• During the colonial period, European powers often used their own
currencies to conduct trade with colonies, leading to the widespread
use of multiple currencies in many regions.
• In the 20th century, the gold standard was established, where the
value of currency was tied to the value of gold. This system was
abandoned in the 1970s.
• Today, most countries use fiat money, which is not backed by a
physical commodity like gold, but by the government's promise to
honor its value.

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Figure: Barter System

Activity

Which of the following was never used as currency?

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Test your knowledge

1. What is money and why is it 4. Why did people start using coins
important? as a form of currency?

2. What was bartering and why was it 5. What is paper money and when
difficult to use? did it first start being used?

3. What were some of the earliest

forms of currency used by ancient
societies?

MCQs

1. What was the first form of 4. When did the first paper money
currency used by ancient come into use in Europe?
societies? a) 12th century
a) Seashells b) 14th century
b) Beads c) 16th century
c) Salt d) 18th century
d) All of the above
5. Which country first introduced
2. Which country first introduced banknotes?
paper money? a) France
a) Italy b) England
b) China c) Germany
c) Greece d) Japan
d) Egypt

3. What was the first metal used to

make coins?
a) Copper
b) Gold
c) Iron
d) Silver

Answers

Activity

Flower, lipstick

Test your knowledge

1. Money is a medium of exchange used to buy goods and services. It’s

important because it helps facilitate trade and commerce, making it
easier for people to exchange goods and services.

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2. Bartering is the exchange of goods and services without the use of

money. It was difficult to use because it was hard to find someone who
wanted exactly what you had to offer, and the value of goods could
vary widely from one region to another.

3. Some of the earliest forms of currency used by ancient societies

include seashells, beads, and salt.

4. Coins were developed as a way to standardise the value of currency.

Coins were stamped with a specific value, which made them easy to
recognize and exchange.

5. Paper money is a form of currency made from paper. It first started

being used in China during the Tang dynasty (618-907 AD).

MCQs

1. d)
2. b)
3. d)
4. b)
5. b)

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Forms of Money
Let’s explore the exciting world of 4. Digital wallets
money deeper! Money is what we Digital wallets are apps that
use to buy things we want, like that allow you to store your payment
cool new video game or a delicious information, such as credit or debit
slice of pizza. But did you know that card numbers, in your phone or
there are different types of money online. You can use a digital wallet
beyond just the physical bills and to make purchases online or in
coins we use? From digital wallets to stores. Examples of digital wallets
cryptocurrencies and even trading include Cred, Paytm etc.
goods and services, there are many
ways to exchange value. So buckle 5. Cryptocurrencies
up and get ready to learn about the Cryptocurrencies are a type
fascinating forms of money that exist of digital currency that use
in the world today! encryption techniques to regulate
the generation of units of
1. Cash currency and verify the transfer
Cash is physical money that you of funds. The most well-known
can hold in your hand, such as cryptocurrency is Bitcoin.
paper bills and metal coins.
6. Bartering
2. Credit cards Bartering is a system of trade
Credit cards are a type of payment where goods or services are
card that allows you to borrow exchanged directly for other
money to make purchases. You goods or services, without the use
can use a credit card to buy things of money. For example, you might
now and pay for them later. trade your old bicycle for your
friend’s skateboard.
3. Debit cards
Debit cards are also payment These are the different forms of
cards, but they allow you to spend money present in the world today!
money you already have in your Which one is your favourite?
bank account. When you use a
debit card, the money is taken
directly from your account.

Figure: Forms of Money

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Activity

Which Given below are the names of different monetary items, write the
correct form of money they belong to.

Ethereum - __________________
HDFC Regalia card - ___________________
Google Play - _______________________
Euro coin - __________________________
Solana - ____________________

Test your knowledge

1. What is cryptocurrency? 4. What is a virtual currency?

2. What is a mobile wallet? 5. What is a contactless payment?

3. What is the difference between a

debit card and a credit card?

MCQs

1. Which of the following is not a 3. Which metal is commonly used to

form of digital money? make coins?
a) Bitcoin a) Aluminium
b) PayPal b) Copper
c) Credit Card c) Platinum
d) Cash d) Zinc

2. Which country has the highest 4. Which of the following is not a type
percentage of cashless of cryptocurrency?
transactions? a) Ethereum
a) China b) Dogecoin
b) Sweden c) Litecoin
c) United States d) Euro
d) Japan

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Answers

Activity
Ethereum - _____Crypto currency _____________
HDFC Regalia card - ____Credit card_______________
Google Play - _____Mobile wallet __________________
Euro coin - _______Coin___________________
Solana - ______Crypto currency______________

Test your knowledge

1. Cryptocurrency is a digital form of currency that uses encryption

techniques to regulate the generation of units of currency and verify
the transfer of funds.

2. A mobile wallet is a digital wallet that stores payment information on a

mobile device, allowing users to make payments through their phone.

3. A debit card allows you to spend money that you already have in your
bank account, while a credit card allows you to borrow money that you
must pay back later, typically with interest.

4. A virtual currency is a form of digital currency that can be used to

purchase goods and services online, but is not recognized as legal
tender by governments.

5. A contactless payment is a payment made by holding a mobile device

or contactless-enabled card near a point-of-sale terminal, without the
need to physically insert or swipe the card.

MCQs

1. d)
2. b)
3. b)
4. d)

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Currencies
Currencies are the types of money Before currencies, people used a
used in different countries. Just like system called bartering to trade
how we use the rupee in India, other goods and services. Bartering is when
countries have their own currencies. people exchange goods or services
Currency values refer to the exchange directly, without using money. But
rate between one currency and as societies grew more complex and
another. For example, if 1 rupee is trade became more widespread,
worth 0.012 Dollars, that means bartering became difficult to manage.
you can exchange 1 rupee for 0.012 It was hard to find someone who
Dollars. wanted exactly what you had to offer,
and the value of goods could vary
Here are some examples of different widely from one region to another.
types of currencies across the globe: That’s when currencies started to
come into being. As trade became
1. The United States dollar (USD) has more sophisticated, metals like gold
a picture of George Washington on and silver were used as currencies
the one-dollar bill. because they were rare and durable.
Eventually, coins were developed
2. The Euro (EUR) is recognized by as a way to standardise the value of
its stylized “€” symbol and has currency. Coins were stamped with
different designs for the back of a specific value, which made them
coins in each of the 19 countries easy to recognize and exchange.
that use it. Paper money also developed, which
was easier to carry around in large
3. The British pound sterling (GBP) is amounts than coins.
often simply called “pounds” and
has been used for over a thousand Today, most currencies are managed
years. by governments or central banks,
which control the supply of money
4. The Japanese yen (JPY) features and set interest rates to regulate the
images of famous landmarks like economy. The value of currencies
Mount Fuji and the cherry blossom. can fluctuate based on many factors,
including supply and demand,
5. Bitcoin is a type of digital currency economic indicators, and political
that is not backed by any stability.
government or institution. It’s like
virtual money that people can use
to buy things online.

Dollar Euro Yen Pound Bitcoin

Figure: Types of Currencies

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Currency Rate in INR*

US Dollars 81.91 INR
Euro 90.04 INR
British Pound 101.71 INR
Australian Dollars 54.96 INR
UAE Dirham 22.31 INR
New Zealand Dollar 50.82 INR
Canadian Dollar 61.36 INR
Swiss Franc 91.75 INR
Japanese Yen 0.6113 INR
Saudi Riyal 21.85 INR
Qatari Rial 22.5 INR
Omani Rial 213.02 INR
Bahraini Dinar 217.32 INR
Kuwaiti Dinar 267.58 INR
Singapore Dollar 61.57 INR
Malaysian Ringgit 18.55 INR
Swedish Krona 7.93 INR
Danish Krone 12.09 INR
Thai Baht 2.389 INR
Hong Kong Dollar 10.44 INR
South African Rand 4.54 INR
Chinese Yuan 11.93 INR

Activity

Write True or False for each statement.

1. The Euro is the official currency of Australia.

2. The Chinese yuan is also known as the Renminbi.

3. The Canadian dollar is also called the loonie because of the image of a
loon bird on the one-dollar coin.

4. The Swiss franc is the only currency in the world that is still backed by
gold reserves.

5. The United States dollar is the most widely used currency in the world.

* As of 17 April, 2023
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Test your knowledge

1. What is a currency exchange rate? 4. What is currency hedging?

2. What is a currency pair? 5. What is a currency crisis?

3. What is the difference between a

fixed exchange rate and a floating
exchange rate?

MCQs

1. Which civilization used cocoa 4. Which currency is used in Japan?

beans as currency? a) Yen
a) Aztecs b) Euro
b) Mayans c) Pound
c) Incas d) Dollar
d) Egyptians
5. Which country’s currency is the
2. What is the oldest currency still in Euro?
use today? a) Germany
a) US Dollar b) France
b) Chinese Yuan c) Italy
c) British Pound d) All of the above
d) Indian Rupee

3. What does the term “forex” refer

to?
a) A type of stock
b) The foreign exchange market
c) A type of bond
d) The Federal Reserve

Answers
Activity
1. False
2. True
3. True
4. False
5. True

Test your knowledge

1. A currency exchange rate is the value of one currency in relation

to another. It represents the amount of one currency that can be
exchanged for another currency.

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2. A currency pair is a combination of two different currencies that are

traded together in the forex market. Examples include USD/EUR, GBP/
JPY, and AUD/USD.

3. A fixed exchange rate is a system in which the value of a currency

is fixed to another currency, commodity, or basket of currencies. A
floating exchange rate is a system in which the value of a currency is
determined by the market forces of supply and demand.

4. Currency hedging is a strategy used by investors to reduce the risks

associated with fluctuations in currency exchange rates. It involves
using financial instruments such as futures contracts, options, and
swaps to protect against currency movements that could negatively
affect investment returns.

5. A currency crisis occurs when there is a sudden and severe

devaluation of a country’s currency, leading to a loss of confidence in
the currency and a rapid decline in its value. This can have significant
economic and social consequences for the affected country.

MCQs

1. a)
2. c)
3. b)
4. a)
5. d)

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This textbook is a sample, for full

textbook contact the NFO team

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 National Finance Olympiad

Our Mentors
“
Financial literacy can give founders a competitive
advantage. By understanding financial concepts and
managing finances effectively, founders can make smarter
decisions, mitigate risks, and capitalize on opportunities.
This can help them to stay ahead of the competition and
“
succeed in the long run.

-Reeju Datta
Cofounder - Cashfree

“
Financial literacy can help individuals and business
officers communicate more effectively with financial
professionals and stakeholders. Financially literate
individuals can understand financial reports, investment
opportunities, and financial jargon and can explain
financial strategies and decisions to investors,
“
shareholders, and board members.

- Soumya Kanti Purkayastha

Investor, Mentor

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