It’s more important than ever to have the financial literacy skills needed to manage your money and investments wisely.
To help Canadians find the resources they need, a coalition of seven non-profit organizations have joined together to organize this November’s Financial Literacy Month. What better time to take a quick quiz to test your knowledge of a few key financial terms?
Financial literacy quiz
Select which statement you think best answers each of the following questions:
1. What is your FICO score?
- A score of your creditworthiness as determined by Fair, Isaac and Company.
- A score lenders use to determine your ability to repay loans.
- A score lenders use to set the interest rate you will be charged on a loan.
- All of the above.
- The total outstanding balance owing on the card as of that month.
- 1% or 2% of the outstanding balance, plus finance charges and fees
- 10% of the outstanding balance.
- 5% of the outstanding balance
- Up to $2,000 per year.
- Up to $2,500 per year.
- Up to $5,000 per year.
- You may contribute as much as you want each year up to a maximum lifetime limit of $50,000 per child.
- Yes, the same rules apply to registered and non-registered investments.
- Yes, but you only pay tax on the earnings when you withdraw the funds.
- No, you only pay tax on contributions that are above your annual allowable limit.
- No, the earnings are tax-free.
- Up to 5% of your annual income per year.
- Up to 15% of your annual income per year.
- Up to $10,000 per year starting in 2015 ($5,500 per year, 2013-2014; $5,000 per year, 2009-2012).
- Up to $500 per year.
- A will that covers a whole estate.
- A will that is entirely handwritten.
- A will that divides an estate into two equal halves.
- A will that is created online.
- Your contributions can be automatically deducted from your pay cheque.
- You benefit from immediate tax savings.
- Your employer may match a percentage of your contribution.
- All of the above.
- Income earned in a given tax year.
- Profits on the sale of investments.
- Interest paid on guaranteed investments.
- Annual pay increases.
- Life Insurance that terminates at age 90.
- Life Insurance that provides lifelong protection.
- Life Insurance that provides protection for a fixed annual payment for a given number of years.
- Life Insurance designed to cover you for the term of your mortgage.
- An annual dividend payment.
- An annual interest payment.
- An annual income tax refund.
- A way to convert savings into regular income payments.
Answers: 1-d, 2-b, 3-d, 4-b, 5-c, 6-b, 7-d, 8-b, 9-c, 10-d
Scored 10 out of 10? Congratulations! You are well on your way to a sound understanding of financial terminology. Got a few answers wrong? Don’t worry. It’s easier than you think to get the information you need to make wise financial decisions. Discover the value of financial advice.
- The road to financial security starts with action: Get going with our Bright Start tool.