Here is a little personal finance quiz, as referenced in this Moisés Naím piece for the Atlantic. Only 30% of Americans aced this thing, so if you do, give yourself a little pat on the back. And a cookie. It’s Friday.
1. Suppose you had $100 in a savings account and the interest rate was 2 percent per year. After five years, how much do you think you would have in the account if you left the money to grow? A) more than $102; B) exactly $102; C) less than $102; D) do not know; refuse to answer.
2. Imagine that the interest rate on your savings account is 1 percent per year and inflation is 2 percent per year. After one year, would you be able to buy A) more than, B) exactly the same as, or C) less than today with the money in this account?; D) do not know; refuse to answer.
3. Do you think that the following statement is true or false? “Buying a single company stock usually provides a safer return than a stock mutual fund.” A) true; B) false; C) do not know; refuse to answer.
The correct answers are 1-A; 2-C; and 3-B.
The Russians did the worst but sssh, they are going through enough as it is.