A quick cutie of a financial quiz

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Answers after the jump.

Data released by Wells Fargo — which surveyed 2,300 adults — in October sheds some light on four basic financial questions that people couldn’t answer.

Which of the following statements describes the main function of the stock market?

A) The stock market brings people who want to buy stocks together with people who want to sell stocks.
B) The stock market helps predict stock earnings
C) The stock market results in an increase in the price of stocks
D) None of the above
E) Not sure

If you had $100 in a savings account and the interest rate was 2 percent per year, after 5 years, how much do you think you would have in the account if you left the money to grow?

A) Exactly $102
B) Less than $102
C) More than $102
D) Not sure

If the interest rate on your savings account was 1 percent per year and inflation was 2 percent per year, after 1 year, how much would you be able to buy with the money in this account?

A) More than today
B) Exactly the same as today
C) Less than today
D) Not sure

Which provides a safer return, buying a single company’s stock or a mutual fund?

A) Single company’s stock
B) Mutual fund
C) Not sure

 

Answers:

Which of the following statements describes the main function of the stock market?A) The stock market brings people who want to buy stocks together with people who want to sell stocks.
B) The stock market helps predict stock earnings
C) The stock market results in an increase in the price of stocks
D) None of the above
E) Not sure

The correct answers is A and 44 percent of boomers got it right, compared to just 39 percent of millennials. What’s more, many millennials — rather than answering that they didn’t know — got the question wrong. Fully 17 percent answered B (compared to just 6 percent of boomers) and 11 percent answered C (versus 4 percent of boomers).

If you had $100 in a savings account and the interest rate was 2 percent per year, after 5 years, how much do you think you would have in the account if you left the money to grow?
A) Exactly $102
B) Less than $102
C) More than $102
D) Not sure

The right answers is C, “more than $102.” Fewer than three in four millennials got that right (73 percent) compared to more than eight in 10 boomers (82 percent). The second most popular answer for millennials was “exactly $102” (10 percent said that versus 3 percent of boomers).

If the interest rate on your savings account was 1 percent per year and inflation was 2 percent per year, after 1 year, how much would you be able to buy with the money in this account?
A) More than today
B) Exactly the same as today
C) Less than today
D) Not sure

Fewer than half of millennials got this question right (40 percent) — the correct answer is “less than today” — compared to 73 percent of boomers.

Which provides a safer return, buying a single company’s stock or a mutual fund?
A) Single company’s stock
B) Mutual fund
C) Not sure

About half of millennials answered this question correctly (51 percent) — the correct answer is “mutual fund” — compared to two-thirds of boomers.

 

(H/T: New York Post)

by Skip

Co-founder of GraniteGrok, my concern is around Individual Liberty and Freedom (and how Government is taking that away from us). My fight, from a Conservative (with small “L” libertarian leanings) and evangelical Christian perspective, is with the Progressives that are forcing a collectivized and secular humanistic future upon us. As TEA Party activist, citizen journalist (and pundit!), my goal is to use the New Media to advance the radical notions of America’s Founders back into our culture again.