Join the 4% Who Can Ace This Financial Quiz

When my 12-year-old niece started talking to me about tariffs last weekend, it became even clearer to me how much the economy is on everyone's minds. It is hard to avoid talk about inflation, trade, the strength of the dollar, stagflation, interest rates, and many other economic concepts that often aren't so top of mind in daily life. And since this talk is often caked in rhetoric, it's helpful to have a good understanding of the financial concepts underpinning many of our current headlines.

The FINRA Investor Education Foundation, a financial educational nonprofit, recently asked over 25,000 adults to test their knowledge of consumer finance. The results showed some gaps in knowledge about topics like interest rates, inflation, and compound interest, and as a result only about 4% of participants answered all seven of the test's questions correctly.

Here, you can try your hand at the quiz and check out our insights on the answers.

Question 1:

Suppose you have $100 in a savings account earning 2 percent interest a year. After five years, how much would you have?

A) More than $102

B) Exactly $102

C) Less than $102

Answer to Question 1

Question 2:

Imagine that the interest rate on your savings account is 1 percent a year and inflation is 2 percent a year. After one year, would the money in the account buy more than it does today, exactly the same or less than today?

A) More

B) Same

C) Less

Answer to Question 2

Question 3:

If interest rates rise, what will typically happen to bond prices?

A) Rise

B) Fall

C) Stay the same

D) There is no relationship

Answer to Question 3

Question 4:

True or false: A 15-year mortgage typically requires higher monthly payments than a 30-year mortgage but the total interest over the life of the loan will be less.

A) True

B) False

Answer to Question 4

Question 5:

True or false: Buying a single company's stock usually provides a safer return than a stock mutual fund.

A) True

B) False

Answer to Question 5

Question 6:

Suppose you owe $1,000 on a loan and the interest rate you are charged is 20% per year compounded annually. If you didn't pay anything off, at this interest rate, how many years would it take for the amount you owe to double?

A) Less than 2 years

B) 2 to 4 years

C) 5 to 9 years

D) 10 or more years

Answer to Question 6

Question 7:

Which of the following indicates the highest probability of getting a particular disease?

A) There is a one-in-twenty chance of getting the disease

B) 2% of the population will get the disease

C) 25 out of every 1,000 people will get the disease

Answer to Question 7

So, how did you do? No matter how you scored, hopefully, you gained a nugget or two of knowledge to contextualize current events and make the most of your money!

Feel free to share this quiz or take a look at the original on FINRA's website here.