Catch a Gideon

2006 Jumpstart Questionaire Part 6

November 8th, 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.

26. Kelly and Pete just had a baby. They received money as baby gifts and want to put it away for the baby’s education. Which of the following tends to have the highest growth over periods of time as long as 18 years?

44.8% a) A U.S. Govt. savings bond

34.8% b) A savings account

6.3% c) A checking account

*14.2% d) Stocks

If something has a higher growth rate then its growth rate will be higher after any amount of time. Stocks are riskier, but are generally held to have a 10% return on average.

27. Karen has just applied for a credit card. She is an 18-year-old high school graduate with few valuable possessions and no credit history. If Karen is granted a credit card, which of the following is the most likely way that the credit card company will reduce ITS risk?

13.6% a) It will charge Karen twice the finance charge rate it charges

older cardholders.

*55.3% b) It will start Karen out with a small line of credit to see how she handles

the account.

10.5% c) It will make Karen’s parents pledge their home to repay Karen’s credit

card debt.

20.7% d) It will require Karen to have both parents co-sign for the card.

28. Maria worked her way through college earning $20,000 per year. After graduation, her first job pays $40,000. The total dollar amount Maria will have to pay in Federal Income taxes in her new job will:

11.0% a) Stay the same as when she was in college.

10.7% b) Be lower than when she was in college.

*42.1% c) Double, at least, from when she was in college.

36.2% d) Go up a little from when she was in college.

It may more than double if she is moved into a higher tax bracket.

29. Which of the following best describes the primary sources of income for most people age 20-35?

8.0% a) Profits from business

7.2% b) Rents

7.0% c) Dividends and interest

*77.8% d) Salaries, wages, tips

30. If you are behind on your debt payments and go to a responsible credit counseling service such as the Consumer Credit Counseling Services, what help can they give you?

*67.1% a) They can work with those who loaned you money to set up a payment

schedule that you can meet.

11.8% b) They can force those who loaned you money to forgive all your debts.

11.9% c) They can cancel and cut up all of your credit cards without your

permission.

9.2% d) They can get the federal government to apply your income taxes to pay

off your debts.

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