How much do you know about various financial topics? Take this short financial literacy quiz that was recently used in a national research study. Below are 12 quiz questions, followed by the correct answers. Each question should be answered with a true or false. See how much you know about topics such as investing, Social Security, and credit.
1. Matthew and Alicia just had a baby. They received money as baby gifts and want to put it away for the baby's education. A U.S. government savings bond is likely to provide the highest growth over the next 18 years.
2. If you are willing to receive a lower Social Security retirement check, Social Security allows you to retire as early as age 62.
3. Employers who provide pension plans are also required to provide health insurance to their retirees.
4. If you begin receiving Social Security benefits at 62, you are eligible for Medicare benefits at the same time.
5. Under current law, Medicare pays nursing home expenses for people with Alzheimer's disease.
6. Your credit report includes employment data, your payment history, any inquiries made by creditors, and any public record information.
7. All investment products bought at your bank are covered by FDIC insurance.
8. If you are behind on debt payments and go to a credit counseling service, they can get the federal government to apply your income tax refund to pay off your debts.
9. Whole life insurance has a savings feature while term life insurance does not.
10. After signing a contract to buy a new car, you have three days to change your mind.
11. When you purchase shares of a mutual fund, your money is invested in a variety of stocks and bonds.
12. If you expect to carry a balance on your credit card, the annual percentage rate (APR) is the most important factor to look at when comparing credit card offers.
1. F- Stocks produce higher returns over the long term.
2. T- Benefits are permanently reduced when they are claimed prior to full retirement age.
3. F- Employers are not required to provide health insurance.
4. F- Medicare eligibility begins at age 65.
5. F- Medicare generally does not cover costs of long-term care.
6. T- Employment and credit use history, inquiries, and data from public records are standard features of credit reports.
7. F- Non-bank products, such as mutual funds, are not FDIC insured.
8. F- The federal government does not apply tax refunds to reduce debts.
9. T- The savings feature of whole life insurance allows policyholders to borrow against their accumulated cash value.
10. F- There is no "cooling off period" for new car purchases.
11. T- Mutual funds are a large, professionally managed portfolio of securities.
12. T- The lower the interest rate on a credit card, the lower the finance charges.