Financial Literacy Quiz
Navigating the countless financial services products and providers, understanding the benefits and risks of the choices available can be overwhelming. Being able to buy a home, support a child’s postsecondary education, enjoy recreation and leisure activities and retire comfortably, all without the burden of unmanageable debt, requires Canadians to be knowledgeable and have an ability to navigate their way through financial options, the credit industry and the financial sector in general.
Take this short quiz assess your financial literacy. Take this short quiz assess your financial literacy. Grab a pen and pencil (yep, the old fashion way!) and mark your answers to the questions below.
What's your level of financial knowledge?
1. Will your savings have at least as much buying power in a year’s time if the interest rate you get on your savings is 3% and the inflation rate is at 5%?
a) Yes
b) No
2. What is a credit report?
a) A list of your financial assets and liabilities
b) A monthly credit card statement
c) A loan and bill payment history
d) A credit line with a financial institution
3. Your stocks on the stock market are insured by:
a) The National Deposit Insurance Corporation
b) The Securities and Exchange Commission
c) The Bank of Canada
d) No one
4. By using unit pricing at the grocery store, you can easily compare the cost of any brand and any package size. True or false.
a) True
b) False
5. Who would need the greatest amount of life insurance if each of the following persons had the same amount of take home pay?
a) A young single woman with two young children
b) A young single woman without children
c) An elderly retired man, with a wife who is also retired
d) A young married man without children
6. If you have a savings account at a bank, which of the following would be correct concerning the interest that you would earn on this account?
a) Sales tax may be charged on the interest that you earn
b) You cannot earn interest until you pass your 18th birthday
c) Earnings from savings account interest may not be taxed
d) Income tax may be charged on the interest if your income is high enough
7. Which group would have the greatest problem during periods of high inflation that lasts several years?
a) Young working couples with no children
b) Young working couples with children
c) Older, working couples saving for retirement
d) Older people living on fixed retirement income
8. Carol has saved $12,000 for her post-secondary education expenses by working part-time. Her plan is to start school next year and she needs all of the money she saved. Which of the following is the safest place for her savings for school?
a) Corporate bonds
b) Mutual Funds
c) A bank savings account
d) Locked in a safe at home
e) Stocks
9. Which of the following types of investment would best protect the purchasing power of a family’s savings in the event of a sudden increase in inflation?
a) A twenty-five year corporate bond
b) A house financed with a fixed-rate mortgage
c) A 10-year bond issued by a corporation
d) A certificate of deposit at a bank
10. Under which of the following circumstances would it be financially beneficial to borrow money to buy something now and repay it with future income?
a) When something goes on sale
b) When the interest on the loan is greater than the interest obtained from a savings account
c) When buying something on credit allows someone to get a much better paying job
d) It is always more beneficial to borrow money to buy something now and repay it with future income
11. Which of the following statements is not correct about most ATM (Automated Teller Machine) cards?
a) You can get cash anywhere in the world with no fee
b) You must have a bank account to have an ATM card
c) You can generally get cash 24 hours-a-day
d) You can generally obtain information concerning your bank balance at an ATM machine
12. Which of the following can hurt your credit rating/credit score?
a) Making late payments on loans and debts
b) Staying in one job too long
c) Living in the same location too long
d) Using your credit card frequently for purchases
13. What affects the amount of interest that you would pay on a loan?
a) Your credit rating
b) How much you borrow
c) How long you take to repay the loan
d) All of the above
14. Which of the following will help lower the cost of a home?
a) Paying off the mortgage over a long period of time
b) Agreeing to pay the current rate of interest on the mortgage for as many years as possible
c) Making a larger down payment at the time of purchase
d) Making a smaller down payment at the time of purchase
Click here to find check your answers to the financial literacy quiz!
Adapted from Statistics Canada, 2011, The Financial Knowledge of Canadians, Catalogue number 11-008, pages 37-39.