Money Smarts

Welcome to your Money Smarts quiz!

This is a financial literacy test that was designed about 10 years ago by a couple of Business School professors. It was designed to measure the ability of populations to be "effective economic decision makers". GOOD LUCK!!

1. Suppose you have $100 in a savings account, and the interest rate was 2% per year. After five years, how much do you think you would have in the account if you left the money to grow?
2. Imagine that the interest rate on your savings account was 1% per year and inflation was 2% per year. After one year, how much would you be able to buy with the money in this account?
3. Is this statement TRUE or FALSE?

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