Most Canadians Failed This Basic Quiz – How Do You Stack Up?

Recently, the Canadian Securities Administrators released the results of their annual education study, and the findings are not exactly spectacular. A series of multiple choice questions were given to Canadian participants. The questions were designed to expose the participants' understanding of basic financial concepts. Over half of the 5000 respondents failed this basic quiz.

So, how do you stack up against the majority of Canadians? Here are the questions posed in this survey:

1.

Suppose you had $100 in a savings account and the interest rate was 2% per year. After 5 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). Don't know

2.

Imagine that the interest rate on your savings account was 1% per year and inflation was 2% 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 c). Less than today d). Don't know

3.

Buying a single company’s stock usually provides a safer return than a stock mutual fund.

a). TRUE b). FALSE c). Don't know

4.

When an investor diversifies his or her investments, the risk of losing money increases.

a). TRUE b). FALSE c). Don't know

5.

Mutual funds pay a guaranteed rate of return.

a). TRUE b). FALSE c). Don't know

6.

Investments that offer a higher-than-market rate of return and little to no risk are almost always fraudulent.

a). TRUE b). FALSE c). Don't know

7.

Bond prices go up when interest rates go down.

a). TRUE b). FALSE c). Don't know

The answers to this quiz are as follows:

1. a (78% of survey respondents got this right)
2. c (60% of survey respondents got this right)
3. b (52% of survey respondents got this right)
4. b (51% of survey respondents got this right)
5. b (40% of survey respondents got this right)
6. a (36% of survey respondents got this right)
7. a (25% of survey respondents got this right)

So, how well did you do? If the answer is "not so good", you're in the same boat as most Canadians. While it's good to know you're not alone, this isn't good news for our country as a whole. Canadians are not as financially literate as they ought to be.

If you feel like you need to boost your money knowledge, check out our Financial Intelligence Training (F.I.T.). This training will put you in the top percentile of Canadians when it comes to financial literacy, and the best part is that it's free for all Refresh Financial clients. Click here for more information.

How does your financial knowledge stack up against the majority of Canadians? Let us know in the comments!