Test Your Financial Knowledge

Your first name:

Your email address:

1. Which bias may cause an investor to believe recent performance will continue indefinitely?

Anchoring on past prices

Recency in decision making

Confirmation of old views

Overconfidence in judgment

2. What is the main difference between risk tolerance and risk capacity?

Tolerance is emotional comfort, capacity is financial ability

Tolerance is financial ability, capacity is emotional comfort

Tolerance is market knowledge, capacity is personal opinion

Tolerance is portfolio design, capacity is investment timing

3. Which ratio compares a company’s stock price to its book value?

Price‑to‑Book ratio

Price‑to‑Sales ratio

Price‑to‑Earnings ratio

Price‑to‑Dividend ratio

4. If a bond has a long duration, what does that imply?

Greater sensitivity to interest rate changes

Lower sensitivity to interest rate changes

No sensitivity to interest rate changes

Equal sensitivity to interest rate changes

5. Which macroeconomic factor directly reduces consumer purchasing power?

Falling unemployment levels

Growing GDP expansion

Rising inflation levels

Declining interest levels

6. What is the main purpose of diversification in a portfolio?

Increasing overall risk exposure

Reducing overall risk exposure

Guaranteeing overall risk removal

Equalizing overall risk exposure

7. Which emotion often leads investors to sell their investments too quickly during a market drop?

Fear

Greed

Excitement

Confidence

8. What is the main goal of investing?

To keep money safe and easily accessible.

To avoid paying taxes on your income.

To save for short-term goals like vacations.

To grow wealth over the long term, despite risks.

9. How does inflation impact savings and investments?

Inflation does not affect savings or investments.

Inflation increases the value of savings accounts over time.

Inflation erodes the purchasing power of money, making it harder for savings to keep up.

Inflation only affects high-risk investments like stocks.

10. What is a Real Estate Investment Trust (REIT)?

A way to invest in real estate without owning physical property.

A type of bond issued by real estate companies.

A savings account specifically for real estate investments.

A cryptocurrency tied to property values.

11. Which type of IRA allows tax-free withdrawals in retirement?

Traditional IRA

Roth IRA

401(k)

403(b)

12. What does an expense ratio represent in mutual funds and ETFs?

The total amount of money in your account.

The tax rate on your investments.

The commission paid to your investment advisor.

The percentage of your investment used to cover a fund’s operating costs.

13. Why are FICA Taxes withheld?

To pay Federal taxes

To pay for State Taxes

To pay for Social Security and Medicare

14. The form used to determine your tax withholding amount is called which of the following?

W9

W2

W4

15. In order to determine tax rates in your state, you should visit which of the following state offices?

Secretary of state

State agency that administers taxes, often called the department of revenue

State department of Taxation

Federal Internal Revenue Service

16. You’ll receive a tax refund if

The IRS notifies you that they’ve made a mistake

Your employer withheld more from your paycheck than you owe

You pay a professional to file your tax return

17. What is the name of the form your employer gives you showing your money earned?

W2

W9

W4

1098

18. All Certified Public Accountants are tax experts

True

False

19. Why is it important to customize your resume for each job application?

a. It makes your resume longer

b. It impresses employers with its versatility

c. It focuses on the specific skills and experiences that match the job requirements

d. It’s unnecessary; all resumes should be the same

20. What is the first step in negotiating compensation effectively?

a. Ask for a high salary right away

b. Research industry salary standards

c. Avoid discussing compensation

21. How do lenders decide whether to lend you money and how much interest to charge?

By looking at your credit reports

By checking your credit score

By asking your friends whether they trust you

None of the above

22. What are credit scores?

Games that lenders play to decide whether to lend you money

A scam

Numbers used to summarize the information in your credit reports

Numbers included on your credit reports

23. What is the debt avalanche plan?

A plan to pay off your highest interest debt first while continuing to make minimum payments on all of your other debts

A plan that works by making major lifestyle changes that help you to aggressively tackle all of your debts at once

A plan to pay off your smallest loan or credit card first while making minimum payments on the rest of your loans and cards

None of the above

24. What is debt consolidation?

A process for paying off multiple high-interest debts using a lower-interest loan

A process, often offered by nonprofit organizations, where a credit counselor helps you to develop a budget and work with your lenders to pay off your debts

A process where a lender accepts one large payment, typically 10 to 50 percent of your total loan balance, in exchange for forgiving your debt.

A federal legal process that allows individuals or businesses to have their debts forgiven while providing some repayment to their lenders

25. What should you do if you overspend in a certain category?

Ignore it

Adjust your budget

Cut back on essentials

Increase your income

26. What is a benefit of having a savings account?

Access to credit

Avoiding taxes

Earning interest on your savings

27. What is social security?

A system that guarantees free education for all citizens.

A system that ensures access to healthcare for all citizens.

A program that provides financial support to elderly, blind, or disabled Americans and their families.

A government program that provides housing assistance to low-income individuals

28. What should you do if you receive a letter from the SSA regarding changes to your benefits?

Ignore it, as it may be a mistake

Review and respond immediately if necessary, by calling the SSA or visiting an office.

Share the letter on social media for advice

Toss the letter in the trash.

29. How many credits do you need to retire, if you were born after 1929?

10

20

40

80

30. What factors determine the Survivor Benefit amount?

The number of children the survivor has.

The deceased person’s earnings record and the age of the survivor.

The survivor’s employment history.

Marital status at the time of application.

31. Only those 65 years of age and retired qualify for SSI.

True

False

32. Both SSI and SSDI have work incentive programs, however they are complicated and may require assistance to understand their limits.

True

False

33. What is your age range?

34. Which race or ethnicity best describes you?

35. Which gender best describes you?

36. How would you describe your vision status?

37. What is your approximate annual household income?

38. What is your current employment status?

Employed full time

Employed part time

Self-employed

Unemployed and seeking work

Unemployed and not seeking work

Student

Retired

Unable to work

Prefer not to answer

39. What is the highest level of education you have completed?

Less than high school

High school diploma or GED

Some college

Associate degree

Bachelor’s degree

Graduate or professional degree

Prefer not to answer

40. In which U.S. state, district, or territory do you live?

41. What type of community do you live in?

42. How many people live in your household, including you?

43. Which best describes your current housing situation?

Own my home

Rent my home

Live with family or friends

Temporary housing

Currently unhoused

Another housing situation

Prefer not to answer

44. Do you identify as having a disability other than blindness or low vision?

Yes

No

Not sure

Prefer not to answer

45. How confident do you feel making financial decisions?

Very confident

Somewhat confident

Neither confident nor unconfident

Not very confident

Not at all confident

Prefer not to answer

46. How often do financial concerns cause you stress?

47. What is your most important financial learning goal right now?

48. How do you most prefer to learn about personal finance?

Self-paced online courses

Articles or newsletters

Podcasts or other audio

Webinars or presentations

Visual guides

Prefer not to answer

Email consent:

I agree to receive my quiz results, course recommendations, and the Penny Forward newsletter by email. I can unsubscribe at any time.

Test Your Financial Knowledge

Discover your financial strengths

What you’ll get

A clear snapshot

Insight you can use

A focused learning plan

Ready when you are