2006 Jumpstart Questionaire Part 1 at Catch a Gideon

November 1st, 2006 by digerati

This survey establishes that there are serious misconceptions about various financial topics. The questions are not difficult, bu the average score on the survey was only 52.4%! Take a look at the questions and see how many you know. Starred answers are the correct ones. I’ve added some notes after each question.

1. If you have caused an accident, which type of automobile insurance would cover damage to your own car?

1.1% a) Term

*50.5% b) Collision

9.7% c) Comprehensive

38.7% d) Liability

If you collide with someone you need collision insurance…

2. Matt and Eric are young men. Each has a good credit history. They work at the same company and make approximately the same salary. Matt has borrowed $6,000 to take a foreign vacation. Eric has borrowed $6,000 to buy a car. Who is likely to pay the lowest finance charge?

9.8% a) Matt will pay less because people who travel overseas are better risks. huh?

23.9% b) They will both pay the same because they have almost identical

financial backgrounds. This an adaquete response, and may be true in some cases.

*52.7% c) Eric will pay less because the car is collateral for the loan. This makes the most sense. They will give you money if you say you can give them something if you can’t pay them back. And they won’t even shoot you in the knee!

13.6% d) They will both pay the same because the rate is set by law.

3. If you went to college and earned a 4-year degree, how much more money could you expect to earn than if you only had a high school diploma?

23.5% a) A little more; about 20% more.

*63.9% b) A lot more; about 70% more.

10.5% c) About 10 times as much.

2.1% d) No more; I would make about the same either way.

I have no comments. Just go to college, it’s worth it even if you don’t make more money.

4. Many savings programs are protected by the Federal government against loss. Which of the following is not?

*28.6% a) A bond issued by one of the 50 States Tricky, but state issued bonds are protected by the states, not the Feds.

12.4% b) A U. S. Treasury Bond

9.7% c) A U. S. Savings Bond

49.3% d) A certificate of deposit at the bank These are insured under FDIC I believe.

5. If each of the following persons had the same amount of take home pay, who would need the greatest amount of life insurance?

*61.3% a) A young single woman with two young children.

4.4% b) A young single woman without children.

30.0% c) An elderly retired man, with a wife who is also retired.

4.2% d) A young married man without children.

I don’t really like this question. Who is to say who needs more? You should get life insurance to take care of people you’re worried about. If they need $50,000 or a million, you should get the right amount.