x Abu Dhabi, UAE Thursday 20 July 2017

Put yourself to the test

Check if you know all there is to know about your financial situation with this quick examination of your financial knowledge.

Banking 

1. To establish a bank account or take out a loan in the UAE, a customer will usually need to produce: 

a) A copy of a valid passport; b) A copy of a residence visa; c) A letter from a company verifying employment and salary; d) All of the above 

2. The type of account you qualify for and the services it includes will be determined primarily by your:

a) Credit history; b) Salary; c) Personal choice

3. The average interest rate on credit cards in the UAE is:

a) 12 per cent; b) 24 per cent; c) 34 per cent 

4. A bounced cheque is punishable by: 

a) A Dh500 fine; b) Arrest and possibly jail until the debt is settled; c) Expulsion from the country; d) Potentially all of the above 

5. When you leave your job, the bank will most likely:

a) Sponsor a going-away party; b) Charge a service fee of Dh100; c) Freeze the account until all debts associated with the account are settled or the bank is notified of a new job

Property 

6. Non-UAE nationals may buy property:

a) Wherever they like; b) Only in designated free zones; c) Only in cash 

7. It is common for landlords to demand an entire year's rent upfront:

a) True; b) False 

8. When taking out a mortgage, the borrower often must provide: 

a) Signed cheques that the bank can cash in case the borrower misses payments due; b) A 20 per cent cash downpayment; c) An attested copy of a wedding certificate

9. In many Western countries, interest rates for mortgages are set according to a public benchmark that fluctuates with economic conditions. In the UAE, some mortgage customers were surprised to learn that many banks set mortgages rates based on: 

a) The lunar cycle; b) The US Federal Reserve; c) An internal benchmark that they do not disclose to the public 

10. Once you legally purchase a property in the UAE, you own it for:

a) 99 years; b) As long as you like; c) Depends on whether the property is in Abu Dhabi or Dubai and sometimes whether you are from a GCC country 

Investing

11. One person saves Dh5,000 per month that he puts in a savings account earning 2 per cent annually. Another saves the same amount, but puts it in a mutual fund that earns 8 per cent. How much more does the second man have after 20 years? 

a) Dh100,000; b) Dh750,000; c) Dh1.5 million

12. Most publicly traded companies in the UAE limit the number of shares that can be owned by foreigners to: 

a) 10 per cent; b) 25 per cent; c) 50 per cent 

13. Offshore funds provide an attractive option for American expatriates because they are a risk-free method of shielding income from taxes. 

a) True; b) False 

14. UK expats residing in the UAE will see their pension payments: 

a) Withheld completely; b) Frozen at the same amount from the time they leave the UK; c) Increase with the cost of living

15. Most advisers say that if you have identified a country outside the UAE where you are going to retire, you should: 

a) Shift assets to that country's currency to reduce exposure to currency fluctuations; b) Try to anticipate currency fluctuations and move money when conditions are most favourable; c) Keep your money in dirhams and don't worry about currency fluctuations 

Insurance and estate planning

16. Employers and sponsors are legally required to provide health insurance to: 

a) Anyone working in the UAE; b) Only those employees on an Abu Dhabi visa; c) Only those employees on a Dubai visa 

17. The minimum amount of car insurance required by UAE law is: 

a) Third-party insurance that only covers damage by your car to someone else's property or vehicle or injury to someone else; b) Third-party insurance that also covers you in case the car is stolen or damaged by fire; c) Comprehensive insurance that covers the above situations as well as injury to yourself and other passengers

18. A popular type of life insurance is whole-of-life, which means: 

a) It includes an investment component as well as a lump-sum payout in the event the insured passes away; b) It only provides a payout in the event the insured dies during the term of the policy 

19. Under Sharia law, a deceased person's assets are determined by the guidelines established in the Quran and not the person's wishes: 

a) True; b) False

20. If one spouse dies while living in the Emirates, which of the couple's assets are subject to Sharia law when determining inheritance rights? 

a) None, as long as they have citizenship in another country; b) Only those assets held in the UAE; c) All of the couple's assets regardless of where they are held 

Answers: 

1) d 2) b 3) c 4) d 5) c 6) b 7) a True 8) a 9) c 10) c 11) c 12) b 13) b False 14) b 15) a 16) b 17) a 18) a 19) a True 20) b

If you scored: 18-20 - Doctorate of finance 14-17 - Masters in money 10-13 - Passing grade 0-9 - Back to school 

* Developed in consultation with financial experts at Holborn Assets