Financial Literacy Quiz- SAVING & INVESTING

Answer each question by selecting the letter that you believe to be the correct response. This survey will measure your level of financial literacy in the "saving and investing" area. Overall competency in this category will enable you to implement a diversified savings and investment strategy that is compatible with personal goals. A financially literate person should be able to discuss how saving contributes to financial well-being, explain how investing builds wealth and helps meet financial goals, and evaluate investment alternatives.

Starting in 1956 at age 25, Ron saved $2,000 a year for 50 years. Starting in 1981 at age 50, Molly saved $4,000 a year for 25 years. Who has accumulated the most money?

Molly because she saved more each year
Ron because he has put away more money
Ron because his money has grown for a longer time at compound interest
They would have the same amount because they saved the same
What is the difference between a stock and a bond?

They are actually the same.
Stocks show ownership and bonds are a debtor/creditor relationship.
Stocks show ownership in a business, while bonds are ownership in a government.
Stocks show primary owners of a corporation, while bonds are secondary owners of a corporation.
What is the relationship between risk and return on investment?

The higher the risk, the higher the likely return.
The higher the risk, the lower the likely return.
The lower the risk, the higher the likely return
There is no relationship between risk and the likely return.
Which of the following people is saving but not investing?

Mary who buys stocks for her retirement
John who sets aside all loose change and small bills in a jar for a vacation
Laura who buys stocks for a down-payment on a vacation home
Richard who puts money in his savings account
If you receive a telephone call promising an investment return that is far greater than on similar investments, you should probably:

Invest in it while it’s still available.
Negotiate for an even higher return.
Decline the investment opportunity.
Make an appointment to meet with the person.
6. Which of the following investments would be LEAST beneficial if someone needed money right away?

Money in a savings account
Money invested in a house
Money placed in a safe in the house
Money in a checking account

Financial Literacy Quiz- SAVING & INVESTING

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