How smart are you when it comes to money? Take our quiz and find out!
1. Typically, the lowest interest rate on a loan comes from a …
b) Savings bank or credit union
c) Commercial bank
d) Credit card
2. Which of the following best defines your net worth?
a) The value of your home minus the amount owed on your mortgage
b) How much money you have minus how much money you owe
c) The total value of your assets minus your liabilities
d) How much money is left from your paycheck after you pay your monthly bills
3. What percentage of my income should I spend on my monthly mortgage payment?
a) Whatever the bank says you qualify for
b) No more than 25 percent of your gross pay or 35 percent of your take-home pay
c) No more than 33 percent of your gross pay
d) Approximately 20 percent of my household take-home pay
4. You’ve just received a financial windfall — a large inheritance or you’ve won the lottery. To protect your windfall, which of the following actions should you take?
a) Speak with your banker to find a safe place to temporarily park your money
b) Look at all of your debt – credit cards, medical, student loans – and pay it off
c) You may owe a large amount of taxes – consider hiring an accountant
d) All of the above
5. Homeowners trying to avoid foreclosure may consider a “short sale.” Which of the following statements is not true about short sales?
a) A short sale is when a homeowner sells their home for less money than the balance owed on the mortgage
b) You must have your lender’s approval to do a short sale.
c) A short sale automatically releases the borrower from the obligation to pay the remaining balance of the loan.
d) Most lenders require that a homeowner attempt to sell their home listed with a real estate agent at an approved price for at least 60 to 90 days prior to approving a short sale.
6. How much should you have in an emergency savings account?
b) 3 months of living expenses
c) 6 months of living expenses
d) Enough money to cover one month’s household income
7. If you have caused an accident, which type of automobile insurance would cover damage to your own car?
8. The peak value of the Dow Jones index before the Great Depression was 380 points. When was the same level reached after depression?
9. Short-selling means:
a) Borrowing shares, selling them and buying them back for less money after the price has fallen.
b) Buying a small number of shares in order to cost average.
c) Selling shares after holding them for less than a day.
d) Selling shares at a loss.
10. Penny stocks are:
a) Stocks with the price less than $1.
b) Stocks with the price less than $2.
c) Stocks with the price less than $5.
d) Stock that trades at a relatively low price and market capitalization.
- B 2. b 3.b 4. D 5. C. 6. B 7.C 8. D 9. A 10. D
Congratulations you’re a money genius! From stocks to insurance, you have a very firm graps on all apsects of finance and business. We wish we would give you some advice but you obviously don’t need it. Feel free to share your tips with the Stylist community!
You may not be a genius yet but you do have a solid understanding of the most important aspects of money matters. You can manage your household but the world of stocks and trading is still a little foregin to you. If you commit just a little bit of time to reading finance news, be it in the business pages of your newspaper or your favourite blog, you’ll polish up your skills in no time.
4-5: Need help
Okay, so you’re a little rusty. But don’t worry! And more importanty, don’t ever feel embarrassed to ask for help. This may save you from making grave financial mistakes and teach you valuable lessons along the way.
5 and under: Fail
Step away from the ATM! Just kidding… You may not know how the market works or what insurance policy you need but you do know the value of money. It’s now just a question of putting into a wider context to fully appreciate the greater financial picture.