S&P 500, Dow Jones Global ex-US, Gold, Bloomberg Commodity Index returns exclude reinvested dividends (gold does not pay a dividend) and the three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods.
Sources: Yahoo! Finance; MarketWatch; djindexes.com; U.S. Treasury; London Bullion Market Association.
Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. N/A means not applicable.
WHAT DO YOU KNOW ABOUT MONEY AND FINANCES? When Annamaria Lusardi was a graduate student, she noticed something remarkable. People who earned similar amounts during their working years didn’t arrive at retirement with the same amount of wealth. The reason had a lot to do with financial decision-making that resulted from low financial literacy.
A 2022 report from the Global Financial Literacy Excellence Center (GFLEC) found that, on average, American adults answered about 50 percent of financial literacy questions correctly. This quiz has a lot fewer questions than the GFLEC survey, but they may be quite challenging.
1. You have $1,000 in an account. It earns 4 percent interest each year, and you keep the interest in the account. After two years, will you have:
a. $1,080
b. More than $1,080
c. Less than $1,080
d. I don’t know
2. Your account earns 4 percent interest per year and inflation is 5 percent per year. After one year, the money in the account will buy:
a. Exactly what it buys today
b. More than it buys today
c. Less than it buys today
d. I don’t know
3. The monthly payments on a variable rate mortgage are not fixed. What happens to those payments when rates increase?
a. Payments rise
b. Payments fall
c. Payments stay the same
d. I don’t know
4. When interest rates move higher, bond prices move:
a. Higher
b. Lower
c. Stay the same
d. I don’t know
5. You owe $1,000 on your credit card. The card company charges an interest rate of 25 percent compounded annually. If you make no payments on this credit card, how many years will it take before you owe twice as much?
a. Two years
b. Three to four years
c. Four to five years
d. Six or more years.
If you have any questions about the answers, let us know.
Weekly Focus – Think About It
“I cannot teach anybody anything. I can only make them think.”
—Socrates, philosopher
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