This setting determines what fraction of the achieved score is subtracted for each wrong response. It is only applicable if the quiz is run in adaptive mode.

The penalty factor should be a number between 0 and 1. A penalty factor of 1 means that the student has to get the answer right in his first response to get any credit for it at all. A penalty factor of 0 means the student can try as often as he likes and still get the full marks.