Think you are fiscally savvy? Take the quiz. Each question is worth one point. Answers and explanations will be published in the next post.
1. Which of the following investments is most risky if held for six months.
a) A money market account
b) 100 shares of XYZ stock
c) A bank CD
d) A ten-year corporate bond
2. Which of the following would be the most risky investment for retirement in 40 years?
a) 100 shares of XYZ stock
b) A money market fund
c) A bond mutual fund
d) A 1 oz bar of gold
3. If you are retiring in 10 years, rank the following portfolios from most appropriate to least appropriate. Assume all have a total value of $1,000,000.
I. 50% stock mutual funds, 50% bond mutual funds
II. 100% bank CDs
III. 100% stock mutual funds
IV. 100% company stock
V. 70% stock mutual funds, 20% bond mutual funds, 10% cash
4. Which of the following will result in the most retirement savings, assuming identical investment returns each year, that all investments are tax sheltered, and retirement at age 65?
a) Invest nothing until age 35, then put $2000 away per year until retirement.
b) Invest $1000 when born, then put nothing else away.
c) Invest $2000 per year from age 20 to age 30, then leave it invested but put no more away.
d) Put $100,000 per year away from age 55 until retirement.
5. Which of the following is the least appropriate investment mix?
a) 20 years old and 100% in stocks.
b) 40 years old and 50% in stocks, 50% in bonds.
c) 30 years old and 80% in bonds and 20% in stocks.
d) 65-year-old and 60% in stocks and 40% in bonds.
6. If you wanted to give $100,000 to your great, great, great-grandchildren in 100 years, what would be the best investment to leave?
a) A $100,000 home
b) $100,000 worth of gold bullion
c) $100,000 worth of XYZ stock
d) $100,000 in a money market fund.
7. If you had $3,000 to invest and wanted the chance to grow your money as quickly as possible, which of the following would be the best investment?
a) 100 shares of stock at $30 per share.
b) $3000 worth of a small cap growth mutual fund.
c) $3000 worth of a large cap value mutual fund.
d) $3000 worth of government bonds.
8. Which of the following portfolios has the higher reward to risk ratio?
a) $10,000 in a five-year bank CD
b) $10,000 in a stock mutual fund
c) $7,000 in a stock mutual fund and $3,000 in a bond fund
d) $10,000 in an REIT fund
9. Without using a calculator (no cheating), if you started with a penny and doubled it every day for 30 days, how much would you have in 30 days?
a) Less than $10
b) More than $10 but less than $1000
c) More than $1000 but less than $100,000
d) More than $100,000
10. If you take out a 30 year loan on a $100,000 house at 5% interest and pay the minimum payments every year, how many years will it take to lower the loan balance to $50,000?
a) 15 years
b) 17 years
c) 20 years
d) 25 years
If you want, put your answers in a comment below. Good Luck!
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Disclaimer: This blog is not meant to give financial planning or tax advice. It gives general information on investment strategy, picking stocks, and generally managing money to build wealth. It is not a solicitation to buy or sell stocks or any security. Financial planning advice should be sought from a certified financial planner, which the author is not. Tax advice should be sought from a CPA. All investments involve risk and the reader as urged to consider risks carefully and seek the advice of experts if needed before investing.