Are You Street Smart?

20 Questions

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Smart Quizzes & Trivia

Most people spend a small fortune on a college education for book smarts - but when you get in the real world, you must also have street smarts!


Questions and Answers
  • 1. 
    What is interest?
    • A. 

      Interest is money that is easy to understand

    • B. 

      Interest is "rent on money"

    • C. 

      It means you are interested in money

  • 2. 
    What is simple interest?
    • A. 

      Interest that is simple to understand

    • B. 

      An interest rate that is a % of the principal borrowed and does not compound

    • C. 

      Compound interest that is simplified by a calculator

    • D. 

      A zero percent interest rate

  • 3. 
    What is compound interest?
    • A. 

      An interest rate that compounds and complicates your life

    • B. 

      An interest rate mothod that pays interest upon interest

    • C. 

      A compound rate that is paid back early

    • D. 

      A complicated problem in finance

  • 4. 
    Which type of interest, over a period of time, will pay you more?
    • A. 

      Compound

    • B. 

      Simple

  • 5. 
    Who said "Compound interest is the greatest invention of the 20th century?"
    • A. 

      Richard Nixon

    • B. 

      John F. Kennedy

    • C. 

      Albert Einstein

    • D. 

      Alan Greenspan

  • 6. 
    What is the greatest influencer on interest rates?
    • A. 

      Time value of money

    • B. 

      Risk

    • C. 

      Time preference for consumption

    • D. 

      Greedy corporate lawyers

  • 7. 
    Most credit card companies charge which type of interest rate?
    • A. 

      Simple

    • B. 

      Compound

    • C. 

      Mixed

    • D. 

      No interest rate

  • 8. 
    The field of economics is the study of:
    • A. 

      Money

    • B. 

      Resources

    • C. 

      Interest rates

    • D. 

      The science of making choices with limited resources

  • 9. 
    Unlimited wants and limited resources is known as the:
    • A. 

      Economizing problem

    • B. 

      Dismal science

    • C. 

      Personal issues with money

    • D. 

      Whining people who want something for nothing

  • 10. 
    The "tool  from the school" of economics used to make the best choices is called:
    • A. 

      My best guess

    • B. 

      Flip a coin

    • C. 

      Marginal analysis

    • D. 

      Wing it, ready aim fire

  • 11. 
    The underlying reasoning behind marginal analysis is:
    • A. 

      Is the marginal benefit greated than the marginal cost?

    • B. 

      Is the marginal input of labor greater than the marginal cost?

    • C. 

      Is the marginal revenue from producing an extra unit greated than the marginal cost to produce that extra unit?

    • D. 

      All the above

  • 12. 
    If an additonal salesperson cost $30,000 a year to hire, but will bring in an additional $50,000 in sales, what is the marginal cost of hiring the new salesperson?
    • A. 

      $30,000

    • B. 

      $50,000

    • C. 

      $20,000

    • D. 

      $80,000

  • 13. 
    From the above, what is the marginal revenue?
    • A. 

      $30,000

    • B. 

      $80,000

    • C. 

      $50,000

    • D. 

      $20,000

  • 14. 
    If the marginal cost of adding x unit is $1000, and the marginal PROFIT is $1200, should you add the marginal cost?
    • A. 

      Yes

    • B. 

      No

    • C. 

      I don't know

  • 15. 
    Nothing in life is free - NOTHING. What is the definition of "opportunity cost?"
    • A. 

      The cost of opportunities in life

    • B. 

      The cost of the "next best alternative I would do with my time or money"

    • C. 

      The high cost of opportunistic living

  • 16. 
    Which is more valuable: a dollar now or in the future, or in between?
    • A. 

      A dollar now

    • B. 

      A dollar in the future

    • C. 

      A dollar right between the current date and the specific future date

  • 17. 
    If you borrow $1000 at a 10% simple interest rate, how much will you pay back if it is due in one year?
    • A. 

      $1010

    • B. 

      $1050

    • C. 

      $1100

    • D. 

      $1155

  • 18. 
    What does "the present value of future cash flows" mean?
    • A. 

      Money in the future is worth more

    • B. 

      Money expected in the future, discounted at a % interest rate that equates it to present value, or "in today's dollars"

    • C. 

      A Christmas present that is valued at high interest

    • D. 

      Money in the present with interest added to get a future value

  • 19. 
    What does it mean to own "stock" in a corporation?
    • A. 

      It means to own part of a livestock stockyard

    • B. 

      It means you are part owner of a company by purchasing stock of the company

    • C. 

      It means you loan money to the company, but are not an "owner"

    • D. 

      It's just like a bond - you lend money and expect it to be paid back

  • 20. 
    • A. 

      It's lending money to a company and expecting it to be paid back in full to you, plus the "coupon rate" (the stated interest rate)

    • B. 

      It's a railroad term

    • C. 

      It's a type of glue

    • D. 

      It's a mix between ownership equity and a debt instrument