Financial Literacy Quiz! Test Your Trivia Knowledge!
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The greatest way to become financially literate is to put your knowledge and good sense into practice. Financial literacy comes with experience. If you know how to handle money, you will be that much wiser. Regarding this quiz, you must know which investment has shown to produce the highest returns over the long term and the house's actual value. If you are curious and want to learn more about finances, this is the quiz for you.
- 1.
How much in charges are you liable for if your credit card is stolen?
- A.
$100
- B.
$50
- C.
$150
- D.
You are not liable for any charges.
- E.
You are liable for all charges.
Correct Answer
B. $50Explanation
$50 is all that you're legally obligated to pay, but most credit card companies will cover that for you because they want to keep you. However, these same companies may try to sell you insurance for that credit card, despite the fact you don't need it. What you don't know will cost you.Rate this question:
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- 2.
Which investment has shown to produce the highest returns over the long term?
- A.
Bonds
- B.
Mutual Funds
- C.
Stocks
- D.
Commodities
Correct Answer
C. StocksExplanation
Because of economic expansion, stocks have always had higher returns. After all, they play a large part in fueling that expansion.Rate this question:
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- 3.
Which loan is likely to have a lower interest rate?
- A.
$5000 to go on an overseas vacation.
- B.
$5000 to buy a used car.
- C.
$5000 to go to school.
Correct Answer
B. $5000 to buy a used car.Explanation
The used car will have a lower rate because the car can be used as collateral. If you were to default on this loan, they could take the car back. With a vacation or student loan, there's nothing to confiscate.Rate this question:
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- 4.
Which of the following is not asset?
- A.
A stock you own that pays dividends.
- B.
A business you own that runs well without you.
- C.
A house you use for your personal residence.
- D.
A tax lien certificate you bought.
Correct Answer
C. A house you use for your personal residence.Explanation
Your house is not an asset because it does not put money into your pocket, but it sure takes money out of it with bills, payments, maintenance, and taxes. The other choices will continue to put money in your pocket if you were to stop working. The house will not. You assets feed you while your liabilities eat you.Rate this question:
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- 5.
Which of the following is the least liquid investment?
- A.
Stocks
- B.
Money Markets
- C.
Certificates of Deposit
- D.
Tax Lien Certificates
Correct Answer
D. Tax Lien CertificatesExplanation
Tax Lien Certificates have the least liquidity in them because they are the least exposed to market volatility and the least subject to market risk.Rate this question:
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- 6.
Your insurance rates are set in stone and cannot be negotiated.
- A.
True
- B.
False
Correct Answer
B. FalseExplanation
With businesses, everything is negotiable. Businesses are happy to negotiate because every one of them has a competitor and they want to keep you all to themselves. Insurance companies will negotiate with you to get a lower price if you are unsatisfied.Rate this question:
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- 7.
Buying in bulk from stores like Sam's Club and Costco is:
- A.
Cheaper
- B.
More expensive
- C.
Cheaper only if you do it right.
Correct Answer
C. Cheaper only if you do it right.Explanation
Buying in bulk can be a good idea. But when it comes to food when people have more of it around, they tend to overeat, so they end up making the same amount of trips to the store and spending the same amount of money.Rate this question:
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- 8.
Which of the following statements is true?
- A.
You need a job to make money.
- B.
A dollar saved is a dollar earned.
- C.
All debt is bad.
- D.
A mutual fund is well diversified.
- E.
Managing your money does not restrict freedom.
Correct Answer
E. Managing your money does not restrict freedom.Explanation
Managing your money doesn't restrict your financial freedom, it promotes it! You don't need a job to make money, there are four ways to make money. Not all debt is bad. Debt to buy assets that put money back into your pocket is good debt. Mutual funds are only diversified in paper assets, which is only one market. If there was a full market meltdown, you'd be in trouble. All of these statements are analyzed and investigated in great detail in "An Unfair Edge: Revealing the Best Kept Secrets of the Rich".Rate this question:
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- 9.
When looking for an asset to buy, the best kind to get is:
- A.
One that everyone else is buying.
- B.
One that is priced low.
- C.
One that is undervalued.
- D.
One that has a history of yielding good returns.
Correct Answer
C. One that is undervalued.Explanation
Undervalued assets are always best. It means the market hasn't learned to appreciate them yet.Rate this question:
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- 10.
Which of the following is a transaction where everybody wins?
- A.
A wholesale real estate deal.
- B.
An eBay sale.
- C.
A stock trade.
- D.
All of the above.
Correct Answer
D. All of the above.Explanation
All business transactions are win-win. Because the buyer wants the item for sale more than their money and the seller wants the money more than the item.Rate this question:
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- 11.
What is the true value of a house?
- A.
The appraised value.
- B.
The fair market value.
- C.
The average among its comparables.
- D.
What someone else is will to pay for it.
Correct Answer
D. What someone else is will to pay for it.Explanation
The true value of anything and everything is what someone else is willing to pay for it!Rate this question:
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- 12.
Which is more valuable?
- A.
Your Time
- B.
Your Money
- C.
Your Spouse
Correct Answer
A. Your TimeExplanation
Your time is limited. Money comes and goes but time is gone forever. The value of your spouse is... well, we don't know.Rate this question:
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Our quizzes are rigorously reviewed, monitored and continuously updated by our expert board to maintain accuracy, relevance, and timeliness.
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Current Version
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Mar 21, 2023Quiz Edited by
ProProfs Editorial Team -
Jun 14, 2012Quiz Created by
Unfairedgeinc
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