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Financial Literacy Quiz- SAVING & INVESTING

Provided by the International Finance Corporation


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.  

  1. 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
  2. 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.
  3. 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.
  4. 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
  5. 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. 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
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The material in this work is copyrighted. Copying and/or transmitting portions or all of this work without permission may be a violation of applicable law.  IFC does not guarantee the accuracy, reliability or completeness of the content included in this work, or for the conclusions or judgments described herein, and accepts no responsibility or  liability for any omissions or errors (including, without limitation, typographical errors and technical errors) in the content whatsoever or for reliance thereon.

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