What's Your Level of Financial Intelligence?
Answer honestly to test your financial knowledge
Question 1
of 10
1. What is compound interest?
A. Interest on the principal amount only
B. Interest earned on both principal and accumulated interest
C. A type of loan with low interest
D. Interest that doubles your money quickly
2. What\'s the difference between a stock and a bond?
A. They are the same thing
B. Stocks are ownership; bonds are loans
C. Bonds are riskier than stocks
D. Stocks always pay higher returns
3. What does "diversification" mean in investing?
A. Putting all money in one investment
B. Spreading investments across different assets
C. Only investing in stocks
D. Keeping money in savings accounts only
4. What is a 401(k)?
A. A type of credit card
B. An employer-sponsored retirement account
C. A government bond
D. A high-yield savings account
5. What\'s the rule of 72?
A. Save $72 per day
B. Divide 72 by interest rate to estimate years to double money
C. Retire at age 72
D. Pay 72% of your income in taxes
6. What is inflation?
A. When prices decrease over time
B. When the value of money decreases and prices rise
C. A type of investment
D. Interest rate changes
7. What\'s the purpose of an emergency fund?
A. To invest in risky ventures
B. To cover unexpected expenses or income loss
C. To buy luxury items
D. To pay off all debt at once
8. What is the time value of money?
A. Money loses value over time
B. A dollar today is worth more than a dollar in the future
C. Interest rates change with time
D. You should spend money quickly
9. What\'s better for long-term investing: bonds or stocks?
A. Bonds - they are always safer
B. Stocks - historically higher long-term returns
C. They are exactly the same
D. Neither, real estate is best
10. What does "liquidity" refer to?
A. How much money you have
B. How quickly you can access your money
C. The interest rate on your savings
D. Your monthly income