live on a fixed income?Ī) Yes, they pay into Social Security and their income from Social Security remains constant in retirement, so retirees lose purchasing power as inflation rises.ī) No, they pay into Social Security and their income from Social Security rises based on inflation. A tax credit reduces your taxable income.īonus question 3: Do retirees in the U.S. A tax credit reduces your income taxes directly.ī) A tax deduction reduces your income taxes directly.

A simple interest rate is the rate of interest on the principal amount set over a set period of time.īonus question 1: What was the peak of the 30-year fixed mortgage rate in the 1980s?Ī) Mortgage rates peaked at over 10% in the 1980s.ī) Mortgage rates peaked at over 16% in the 1980s.Ĭ) Mortgage rates peaked at over 26% in the 1980s.īonus question 2: What is the difference between a tax deduction and a tax credit?Ī) A tax deduction reduces your taxable income. (b) APR is the annual interest on a loan calculated on the initial loan, including additional costs and fees, and the accumulated interest over the lifetime of the loan. A simple interest rate is the rate of interest on the principal amount that rises over a period of time. (a) APR is the annual interest on a loan calculated on the initial loan, including additional costs and fees, and the accumulated interest over the lifetime of the loan. Question 10: What is APR and how is it different from a simple interest rate? Question 9: What is the Federal Reserve's desired rate of inflation? With a traditional IRA, you contribute with pretax dollars, so you pay tax when you make withdrawals. With a traditional IRA, you contribute with after-tax dollars, so you don't pay tax when you make withdrawals.ī) With a Roth IRA, you contribute with after-tax dollars, so you don't pay tax when you make withdrawals. Question 8: What is the difference between a Roth IRA and traditional IRA?Ī) With a Roth IRA, you contribute with pretax dollars, so you pay tax when you make withdrawals. Her sister Marjorie invests $10,000 in a mutual fund. Question 7: Mary invests $10,000 in her three favorite stocks, all of which have increased in value over the last five years. Question 6: At what age do you qualify for Medicare? Question 5: What has a higher mortgage rate - a 15-year mortgage loan or a 30-year mortgage loan? That is, if something rises from 10% to 20%, it's a 10% rise or a 100 point difference. That is, if something rises from 10% to 20%, it's a 10 percentage point difference or a percentage increase of 100%.ī) A percentage is a portion of a whole expressed as per 100, while a percentage point is the numerical difference between percentages. Question 4: What is the difference between a percentage and a percentage point?Ī) A percentage is a portion of a whole expressed as per 100, while a percentage point is the numerical difference between percentages. in 2023, according to a survey by Experian? Question 3: What was the average credit score in the U.S. Question 2: Assuming you are single and under the age of 65, you must file a federal tax return if your annual income is at least. Question 1: What is the relationship between interest rates and bond prices?Ī) When interest rates rise, bond prices fall and vice versa.ī) When interest rates rise, bond prices rise and vice versa. Financial literacy helps us to plan for the future, and make the often obtuse world of investing and retirement more accessible. Some of the questions may seem tricky, but they are designed to tackle topics that can trip people up.

You don't know what you don't know, until now. There are 10 questions - with three bonus questions thrown in for good measure. We've stuck to some familiar topics - taxes, stocks, interest rates and inflation. Some questions may seem easy, while others are a little trickier. MarketWatch put together a quiz for our readers. Read more here.ĭo you know the difference between a stock and a bond? To mark the occasion, MarketWatch will publish a series of 'Financial Fitness' articles to help readers improve their fiscal health, and offer advice on how to save, invest and spend their money wisely. Financial literacy helps us to plan for the future, and makes the often obtuse world of investing and retirement more accessibleĪpril is National Financial Literacy Month.

Market watch futures