Most Americans Fail This Simple 3-Question Financial Quiz. Can You Pass It?
karavbrandeisky
March 11, 2015
© Brendan McDermid/Reuters Morning commuters outside the New York Stock Exchange.
Following are three questions. If you’ve been around the financial block a few times, you’ll probably find all of them easy to answer. Most Americans didn’t get them right, though, reflecting poor financial literacy. That’s a shame — because, unsurprisingly, the more you know about financial matters and money management, the better you can do at saving and investing, and the more comfortable your retirement will probably be.
Here are the questions — see if you know the answers.
1. Suppose you had $100 in a savings account and the interest rate was 2% per year. After five years, how much do you think you would have in the account if you left the money to grow? (A) More than $102. (B) Exactly $102. (C) Less than $102.
2. Imagine that the interest rate on your savings account was 1% per year and inflation was 2% per year. After one year, how much would you be able to buy with the money in this account? (A) More than today. (B) Exactly the same. (C) Less than today.
3. Please tell me whether this statement is true or false: Buying a single company’s stock usually provides a safer return than a stock mutual fund.
Did you get them all right?
Read more:
Most Americans Fail This Simple 3-Question Financial Quiz.
Re: Most Americans Fail This Simple 3-Question Financial Qui
Where's the cheat sheet?
I am the one who knocks.
Re: Most Americans Fail This Simple 3-Question Financial Qui
You never know. This might be like trick questions.
I am the one who knocks.
Re: Most Americans Fail This Simple 3-Question Financial Qui
Questions like these are why I need a financial planner!
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Re: Most Americans Fail This Simple 3-Question Financial Qui
First two questions were easy. I don't know much about stocks so yeah I got the third one wrong.
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Re: Most Americans Fail This Simple 3-Question Financial Qui
Mutual funds are made up of multiple stocks, so if one goes down, the loss is not as great. Where as if you only have a stock, then if it goes down, you lose. I kind of did mine backwards. Had more mutual funds when I was younger, got more into stocks when I got older. Will probably get out of stocks soon and more into mutual funds.EITSwarrior wrote:First two questions were easy. I don't know much about stocks so yeah I got the third one wrong.