Financial Literacy Quiz

What does it mean to have a 'diversified portfolio' in investing?

• Putting all money in one stock
• Avoiding any stocks
• Investing in various bonds
• Investing in different asset types

If you have $1,000 in a savings account with an annual interest rate of 5%, how much interest will you earn after one year?

(write number only)

 

If you buy a $500 item with a credit card and only pay the minimum balance, what happens?

• You pay interest on the remaining balance
• The debt is cleared immediately
• You get a cash bonus
• The store refunds the item

Which of these is generally considered the riskiest investment?

• Savings account
• Government bonds
• ETF funds
• Stocks in a startup company

Which is typically considered the safest place to keep your emergency fund?

• Luxury goods or gold
• High-yield savings account
• Stocks
• Cryptocurrency

If inflation is 5% and your savings account pays 2% interest, what happens to your purchasing power?

• Your purchasing power increases.
• Your purchasing power stays the same.
• Your purchasing power decreases.
• It depends on the bank.

If you invest €100 at 7% annual return, approximately how many years does it take to double?

 

If an investment promises to double your money in one year with no risk, what should you do?

• Invest immediately
• Tell all your friends to invest as well
• Be cautious; it's likely too good to be true
• Borrow money to invest

What is compound interest?

• Penalty for late payment
• Interest paid only on the original amount
• Interest calculated on both your original amount and accumulated interest
• A fee for borrowing money

Inflation means your money buys more over time.

• TRUE
• FALSE