Financial literacy quiz

Ten questions on the basics everyone should know — compounding, inflation, diversification, fees. Scored, with a leaderboard.

1. Money basics

2. If prices rise 5% a year, what happens to money kept in a drawer?

   • It keeps its value
   • It buys about 5% less each year
   • It buys more
   • Nothing, inflation only affects banks

3. Compound interest means…

   • Interest on the original amount only
   • Interest on the amount plus previous interest
   • A fixed fee each year
   • Interest paid in advance

4. Finish the rule of thumb

5. Spreading money across many investments is called…

   • Leverage
   • Arbitrage
   • Diversification
   • Hedging

6. Match the term to its meaning

7. A fund charging 2% a year versus 0.2% — over 30 years the difference in your final pot is roughly…

   • Under 5%
   • About 10%
   • Around 40%
   • Over 100%

8. Asset or liability?

   • Your savings
   • A rental property
   • Shares you own
   • A car loan
   • Credit card balance
   • Unpaid tax

9. An emergency fund should usually cover…

   • One week of expenses
   • 3–6 months of expenses
   • Two years of expenses
   • Nothing — use credit

10. Put these in the usual order of risk, lowest first

    • Government bonds
    • Corporate bonds
    • Large-company shares
    • Crypto assets

11. Leaderboard

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