Julie Jason's Reader Financial Literacy Quiz #3: "Sophisticated Questions"

Take this quiz, created by professors Annamaria Lusardi and Olivia S. Mitchell (2017 Quarterly Journal of Finance paper, "How Ordinary Consumers Make Complex Economic Decisions: Financial Literacy and Retirement Readiness"). You will get your score when you complete the quiz. Your results will help you assess your level of understanding of SOPHISTICATED financial literacy concepts, discussed in Julie Jason's February 2020 column.

Questions 1-8: "sophisticated" financial literacy questions
Questions 9-12: "summary self-assessment" questions
Questions 13-17: demographic questions

Quoting from the paper: "Competent planning for retirement and investing of retirement assets requires an understanding of several additional [sophisticated] financial concepts, including the risk/return relationship, risk diversification, and how stocks and bonds work."

Question Title

* 1. Which of the following statements describes the main function of the stock market?

The stock market helps to predict stock earnings

The stock market results in an increase in the price of stocks

The stock market brings people who want to buy stocks together with those who want to sell stocks

None of the above

Do not know

Refusal

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* 2. Which of the following statements is correct?

Once one invests in a mutual fund, one cannot withdraw the money in the first year

Mutual funds can invest in several assets, for example invest in both stocks and bonds

Mutual funds pay a guaranteed rate of return which depends on their past performance

None of the above

Do not know

Refusal

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* 3. If the interest rate falls, what should happen to bond prices?

Rise

Fall

Stay the same

None of the above

Do not know

Refusal

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* 4. Buying a company stock usually provides a safer return than a stock mutual fund.

True

False

Do not know

Refusal

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* 5. Stocks are normally riskier than bonds.

True

False

Do not know

Refusal

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* 6. Considering a long time period (for example 10 or 20 years), which asset normally gives the highest return?

Savings accounts

Bonds

Stocks

Do not know

Refusal

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* 7. Normally, which asset displays the highest fluctuations over time?

Savings accounts

Bonds

Stocks

Do not know

Refusal

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* 8. When an investor spreads his money among different assets, does the risk of losing money:

Increase

Decrease

Stay the same

Do not know

Refusal

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* 9. On a scale from 1 to 7, where 1 means very low and 7 means very high, how would you assess your understanding of economics?

Clear

i We adjusted the number you entered based on the slider’s scale.

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* 10. How much of your school's education (high school, college or higher degrees) was devoted to economics?

A lot

Some

Little

Hardly at all

Do not know

Refusal

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* 11. [Have any of your previous employers offered] financial education programs, for example retirement seminars?

Yes

Not applicable

Do not know

Refusal

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* 12. How much have you thought about retirement?

A lot

Some

Little

Hardly at all

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* 13. What is your gender?

Female

Male

Prefer not to answer

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* 14. What is your age?

Under 50

50 or older

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

Did not finish high school

High school degree

Some college

2-year college degree

4-year college degree

Some graduate school

Completed graduate school

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* 16. Would you like to receive Julie Jason's monthly newsletter?

Yes

Question Title

* 17. Please provide your contact information.

First Name *

Last Name

State/Province *

ZIP/Postal Code *

Email Address *