Financial Literacy Exam Quiz! Trivia

12 Questions | Total Attempts: 2532

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Financial Literacy Exam Quiz! Trivia

Can you get past this financial literacy quiz? There is a common saying that to make money; you need to spend money, which is the backbone for every investment as one has to invest to reap more. How conversant are you with the basics of making financial decisions, investments, and some of the things to look out for in your business? This quiz will help test your understanding. Do give it a shot!


Questions and Answers
  • 1. 
    Suppose you have $100 in a savings account earning 2 percent interest a year. After five years, how much would you have?
    • A. 

      More than $102

    • B. 

      Exactly $102

    • C. 

      Less than $102

    • D. 

      Don’t know

  • 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?
    • A. 

      More

    • B. 

      Same

    • C. 

      Less

    • D. 

      Don't know

  • 3. 
    If interest rates rise, what will typically happen to bond prices?
    • A. 

      Rise

    • B. 

      Fall

    • C. 

      Stay the same

    • D. 

      No relationship

    • E. 

      Don't know

  • 4. 
    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.
    • A. 

      True

    • B. 

      False

    • C. 

      Don't know

  • 5. 
    Buying a single company's stock usually provides a safer return than a stock mutual fund.
    • A. 

      True

    • B. 

      False

    • C. 

      Don't know

  • 6. 
    If your investment loses 20% of its value, what percentage of return will you need to break even?
    • A. 

      20%

    • B. 

      More than 20%

    • C. 

      Less than 20%

    • D. 

      Don't know

  • 7. 
    An investment's maximum decline from a previous peak in value is known as its:
    • A. 

      Loss ratio

    • B. 

      Drawdown

    • C. 

      Negative gain

    • D. 

      Don't know

  • 8. 
    You can’t lose money investing in which of the following:
    • A. 

      Diversified mutual funds

    • B. 

      Securities backed by home mortgages

    • C. 

      US Treasury bonds because they are backed by the US Government

    • D. 

      Investment-Grade bonds from Fortune 500 companies

    • E. 

      None of the above

    • F. 

      Don’t know

  • 9. 
    Mutual funds are protected from market losses by:
    • A. 

      The Securities Investment Protection Corporation (SIPC)

    • B. 

      The Federal Deposit Insurance Corporation (FDIC)

    • C. 

      Mutual Fund Insurance Corporation (MFIC)

    • D. 

      None of the above

    • E. 

      Don’t know

  • 10. 
    You invested $1,000 in stock two years ago. The stock’s trading price declined 40% in the first year and rose 40% the next year. As a result, you have:
    • A. 

      Lost money

    • B. 

      Made money

    • C. 

      Broken even

    • D. 

      Don’t know

  • 11. 
    Which of the following Treasury bonds would be impacted more by a change in interest rates?
    • A. 

      5 year

    • B. 

      10 Year

    • C. 

      30 Year

    • D. 

      They would all be impacted about the same

    • E. 

      Don’t know

  • 12. 
    Index mutual funds are:
    • A. 

      Funds indexed to keep up with inflation

    • B. 

      Groups of stocks in a particular market sector, like technology

    • C. 

      Mutual funds designed to mimic an Index, like the S&P 500 Index

    • D. 

      Don’t know

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