take the financial literacy quiz

[brianmanahan]

it is quick, only 15 questions on 1 page

http://apps.finra.org/quiz/1/investorquiz.aspx

what did you get?

 

[Exterous]

14 out of 15. I got #11 wrong. I have a slight issue with #7 as I think its poorly worded and way to vague but I get the intent behind the question

 

[Miramonti]

14/15, because I said bonds go down when interest rates go down. I 100% knew the right answer but some reason clicked the wrong one.

14 out of 15. I got #11 wrong. I have a slight issue with #7 as I think its poorly worded and way to vague but I get the intent behind the question

What is vague about it? You used $500 to invest $1k, lose 50% of $1,000, thus lose all of your original $500 investment.

 

[brianmanahan]

I have a slight issue with #7 as I think its poorly worded and way to vague but I get the intent behind the question

yeah that one was a little vague but eventually just chose what seemed like it had to be right. im like... no way you come out with money in that situation.

 

[Ken g6]

10/15. Would have been 11 if I had made an educated guess instead of selecting "don't know/not sure".

Still, there's a reason I don't invest. I'd like to just give my money to somebody and get at least inflation returns on it, guaranteed. With no fuss. Is that too much to ask? Edit: And have the same guy take care of the tax consequences of investing for no extra charge?

 

[imagoon]

12/15 Not bad since I had no clue what the classes in mutual funds were and have never dealt with section 529.

 

[Engineer]

You scored 93.3% on this test.
You answered 14 of 15 questions correctly.

Missed the "bond" question in bankruptcy (#9). I know stock goes down but I would have thought that the bonds would have been mostly worthless. I guess bondholders get priority?

 

[Jeff7]

11/15. Bleh.

- Which of the following organizations insures you against your losses in the stock market?
I picked SIPC. Derp. Trick question, of sorts. I was thinking about losses in the event of the mutual fund company going under.
- In general, investments that are riskier tend to provide higher returns over time than investments with less risk.
I was thinking "correlation does not imply causation," which was a misinterpretation of the question. If it had said "investments that are riskier will provide higher returns, then it would have matched what my damn brain thought it said.
- If a company files for bankruptcy, which of the following securities is most at risk of becoming virtually worthless?
I didn't have a clue on this one; I don't know much of anything about the bankruptcy process.
- Which of the following best explains why many municipal bonds pay lower yields than other government bonds?
I've never dealt with municipal bonds, so I didn't know this one either.

 

[stlc8tr]

"You scored 100% on this test.
You answered 15 of 15 questions correctly."

It would be fairly easy for any boglehead.

Though I was thinking of a snarky answer to #3...

 

[OverVolt]

12/15

A "no-load" mutual fund is one that…

Don't care

But... try our fund analyzer! http://apps.finra.org/fundanalyzer/1/fa.aspx

"The principal difference between mutual fund share classes (Class A, Class B, Class C, etc.) is:"

Don't care...

"In general, investments that are riskier tend to provide higher returns over time than investments with less risk."

Most people tend to take investments that are too risky and lose it all. What they were trying to say is that the stock market gets better returns than bonds, which is true. It should be phrased "Over the long term do stock market index funds or bonds yield a greater return." And of course the answer is stocks. Bonds yield 2-7% or so and stocks in aggregate yield around 12%. That isn't what the question asked but its how they justified the answer. Stupid.

It never mentioned stocks and just assumed stocks are the "risky" investment. Cause everyone knows if you want to make money just take huge risks and nothing ever goes wrong!

No wonder finance is in such shambles :awe:

"Which of the following organizations insures you against your losses in the stock market?"

Made me laugh because it was a trick question

 

[Exterous]

14 out of 15. I got #11 wrong. I have a slight issue with #7 as I think its poorly worded and way to vague but I get the intent behind the question

What is vague about it? You used $500 to invest $1k, lose 50% of $1,000, thus lose all of your original $500 investment.

7. In general, investments that are riskier tend to provide higher returns over time than investments with less risk.

Nothing about investing $500 in question #7. I think you need reading glasses

 

[Fenixgoon]

10/15, only got 1 actually wrong. the other 4 i didn't know.

 

[Engineer]

14 out of 15. I got #11 wrong. I have a slight issue with #7 as I think its poorly worded and way to vague but I get the intent behind the question

I tend to agree on that one. While you generally "may" get more return, you generally "lose" more in a down market. I chose the generally get more return option though.

 

[RockinZ28]

10/15.

Think I guessed on all but one or two lol.

 

[BoomerD]

11/15...not bad since I don't know squat about stocks and bonds.

 

[Miramonti]

Nothing about investing $500 in question #7. I think you need reading glasses

ADD...same reason I missed #4.

Yes, I had to think twice on #7 too. People do go for higher risk for the 'potential' of higher returns, and that verbage was the catch.

 

[brianmanahan]

I'd like to just give my money to somebody and get at least inflation returns on it, guaranteed. With no fuss. Is that too much to ask? Edit: And have the same guy take care of the tax consequences of investing for no extra charge?

2 options:

1) buying i bonds from the us treasury. they go up with inflation (calculated every 6 mo) plus a fixed amount based on when you buy them (has been as high as %3.6 over inflaction before, but currently %0 over inflation). can only buy 10$k per year though and you cant sell for the first year.

2) buying ee bonds from the us treasury, get %4.5 if you hold them for 20 years which has a good shot at matching/beating inflation. if you dont hold for the full 20 years though you get a pretty crappy return.

 

[RossMAN]

16/15*

*using Alky mathematics

 

[Imp]

10/15 - I fail.

Test is too advanced... Should focus on basics like money in < money out = debt.

 

[Sho'Nuff]

14/15 - got question 12 wrong (the definition of selling short).

 

[Sho'Nuff]

You scored 93.3% on this test.
You answered 14 of 15 questions correctly.

Missed the "bond" question in bankruptcy (#9). I know stock goes down but I would have thought that the bonds would have been mostly worthless. I guess bondholders get priority?

Bond holders are treated as unsecured creditors in bankruptcy. When a company goes bankrupt, the secured creditors have highest priority, then the unsecured creditors, and then shareholders (preferred before common)

 

[MaxPayne63]

14/15 because I didn't bother to read all the answers on one of them

reminds me of the "written" drivers exam I took a couple years ago. I missed one question and felt like a moron since they were all so absurdly easy and was worried I would have to take a class or something. "Oh, don't worry, you only have to get 60% of them right."

I would like to suggest another question.

Q) Which of the following is not a crime that will result in prison, a fine, or punishment of any kind?
1) Smoking a joint
2) Jaywalking
3) Filming police officers with your cell phone
4) Pillaging customer accounts to the tune of $1.6 billion as manager of an investment bank and primary dealer

 

[Avalon]

8/15, marked 7 as I don't know so automatically got them wrong, didn't even bother trying to make a guess.

 

[dquan97]

14/15 as #8 got me.

 

[eits]

33.3% lol

reading that stuff makes my head hurt.