Turns out that people are just about as likely to
overestimate their financial savviness as they are their good looks.
A new survey by the FINRA Investor Education Foundation
found that 75% of U.S. adults say they're pros at managing their finances, but
only 14% could ace a five-question quiz on basic financial concepts.
This was no small study sample size either. A whopping
25,000 consumers took the quiz.
Think you can do a better job? Take the FINRA quiz below,
then click http://www.usfinancialcapability.org/quiz.php
to see explanations for the answers.
Take the FINRA
Financial Literacy Quiz
Question 1
Suppose you have $100 in a savings account earning 2 percent
interest a year. After five years, how much would you have?
More than $102
Exactly $102
Less than $102
Question 2
Imagine that the interest rate on your savings account is 1
percent a year and inflation is 2 percent a year. After one year, would the
money in the account buy more than it does today, exactly the same or less than
today?
More
Less
Same
Question 3
If interest rates rise, what will typically happen to bond
prices? Rise, fall, stay the same, or is there no relationship?
Rise
Fall
Stay the same
There's no relationship to bond price and interest rates.
Question 4
True or false: A 15-year mortgage typically requires higher
monthly payments than a 30-year mortgage but the total interest over the life
of the loan will be less.
True
False
Question 5
True or false: Buying a single company's stock usually
provides a safer return than a stock mutual fund.
True
False
Go to http://www.usfinancialcapability.org/quiz.php
to do the quiz online and get an explanation of the answers.
If you were one of the 86% who struggled with this financial
literacy test, visit us at moneyforlife.com.au.
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