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    FPWM Financial Literacy Questions

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    Rohit Deshmukh
    This document is a 20-question questionnaire created by a group of students to assess the general public's level of financial literacy. The questions cover topics like investing, credit cards, loans, insurance, interest rates, and retirement planning. While some questions may relate to client profiling or wealth planning, care was taken to focus on financial literacy and decision-making.

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    Attribution Non-Commercial (BY-NC)
    Download as PDF, TXT or read online from Scribd

    FPWM Financial Literacy Questions

    Uploaded by

    Rohit Deshmukh
    218 views5 pages
    This document is a 20-question questionnaire created by a group of students to assess the general public's level of financial literacy. The questions cover topics like investing, credit cards, loans, insurance, interest rates, and retirement planning. While some questions may relate to client profiling or wealth planning, care was taken to focus on financial literacy and decision-making.

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    Fpwm Financial Literacy Questions

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    This document is a 20-question questionnaire created by a group of students to assess the general public's level of financial literacy. The questions cover topics like investing, credit cards, loans, insurance, interest rates, and retirement planning. While some questions may relate to client profiling or wealth planning, care was taken to focus on financial literacy and decision-making.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    218 views5 pages

    FPWM Financial Literacy Questions

    Uploaded by

    Rohit Deshmukh
    This document is a 20-question questionnaire created by a group of students to assess the general public's level of financial literacy. The questions cover topics like investing, credit cards, loans, insurance, interest rates, and retirement planning. While some questions may relate to client profiling or wealth planning, care was taken to focus on financial literacy and decision-making.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 5

    GROUP 1

    Questionnaire to assess financial literacy of general public


    Financial Planning and Wealth Management Course Submission - 1
    Submitted By Prateek Jain Piyush Ranjan Rohit Deshmukh Rishabh Maheshwari Debashish Bagg

    This document is a questionnaire prepared by Group 1 of FPWM C2DE section to assess the financial literacy of general public. The set of questions cater to what type of portfolio the person like to invest and what would be the optimal one from his view point. Though there has been enough care taken to keep the questions away from preview of Client profiling and Wealth/ Tax planning for financial decisions, there might have been a few that might fall under both category.

    Question 1.

    What would you do with your first salary?

    Invest Party Save Take care of previous borrowing Question 2. Do you think that people need financial education in formal sense a) Yes b) No Question 3. If each of the following had the same amount of take home pay, who would need the greatest amount of life insurance? c) A young single woman with 2 young children. d) A young single woman without children. e) An elderly retired man, with a wife who is also retired. f) A young married man without children. Question 4. Which of the following credit card users is likely to pay the GREATEST dollar amount in finance charges per year, if they all charge the same amount per year on their cards? a) Vera, who always pays off her credit card bill in full shortly after she receives it. b) Jessica, who only pays the minimum amount each month. c) Megan, who pays at least the minimum amount each month and more, when she has the money. d) Erin, who generally pays off her credit card in full but, occasionally, will pay the minimum when she is short of cash. Question 5. Doug must borrow $12,000 to complete his college education. Which of the following would NOT be likely to reduce the finance charge rate? a) If his parents took out an additional mortgage on their house for the loan. b) If the loan was insured by the Federal Government. c) If he went to a state college rather than a private college. d) If his parents co-signed the loan. Question 6. If you had a savings account at a bank, which of the following would be correct concerning the interest that you would earn on this account? a) Sales tax may be charged on the interest that you earn. b) You cannot earn interest until you pass your 18th birthday. c) Earnings from savings account interest may not be taxed. d) Income tax may be charged on the interest if your income is high enough. Question 7. How much of your free-time would you be willing to devote to learn more about financial issues in a given month? a) No time b) 0-5 Hours c) 5-10 Hours d) More than 10 Hours
    2

    a) b) c) d)

    Question 8.

    Suppose you had $100 in a savings account and the interest rate was 2% per year. After 5 years, how much do you think you would have in the account if you left the money to grow? a) More than 102$ b) Less than 102$ c) Exactly 102$ d) I cannot estimate it even roughly

    Imagine that the interest rate on your savings account was 1% per year and inflation was 2% per year. After 1 year, what would you be able to buy -: a) More than today b) Less than today c) Exactly same as today. d) I cannot estimate it even roughly Question 10. Lets assume that you took a bank credit of 10,000 rubles to be paid back during a year in equal monthly payments. The credit charge is 600 rubles. Give a rough estimate of the annual interest rate on your credit. a) 3 % b) 6% c) 9 % d) 12 % e) I cannot estimate it even roughly Question 11. Assume that the value of your well-diversified portfolio containing a mix of stocks, bonds and cash declined by a whopping 20%. How would you react? a) Make no changes because I am a long term investor. b) Wait for a year before changing to a conservative portfolio c) Wait for 6 months before changing to a conservative portfolio. d) Immediately change to a more conservative portfolio. Question 12. Which portfolio will you use from the following?
    Question 9.

    Portfolio # 1 2 3 4 5 a) Portfolio 1 b) Portfolio 2 c) Portfolio 3 d) Portfolio 4 e) Portfolio 5

    Best Case 117000 125000 134000 143000 151000

    Most Likely 108000 110000 112000 113000 115000

    Worst Case 95000 90000 85000 80000 75000

    The value of one of your portfolios assets increased by 15% in just 4 months. During the same period, other investments in your portfolio increased by only 5%. What would you do? a) Sell off the 15% gainer and invest in something more conservative. b) Sell off part of 15% gainer and reinvest the proceeds more conservatively. c) Continue to hold the asset that gained 15% in four months. Question 14. Suppose you invested Rs 30,000 in a mutual fund with the intention of holding it for 10 years. At what point will you sell the fund and move into something more conservative? a) Rs 28,500 b) Rs 27000 c) Rs 25,500 d) Rs 24000 or less e) I would not sell Question 15. Which of the following options would be a preferable investment? a) 100 Rs invested for 3 years @ 10% p.a compounded annually. b) 100 Rs invested for 3 years @ 10% p.a simple interest. c) 100 Rs invested for 3 years @ 10% compounded quarterly. d) 100 Rs invested for 3 years @ 10% compounded half-yearly. e) 100 Rs invested for 3 years @ 10% compounded monthly. Question 16. Which of the following options would you prefer? a) Invest Rs 1000 for 5 years @ 12% compounded annually. b) Invest Rs 1000 for 7 years @ 12% compounded annually. c) Invest Rs 1000 for 10 years @ 12% compounded annually. Question 17. Ron and Molly are the same age. At age 25 Molly began saving $2,000 a year while Ron saved nothing. At age 50, Ron realized he needed money for retirement and started saving $4,000 per year while Molly kept saving her $2,000. Now they are both 75 years old. Who has the most money in his or her retirement account? a) They would each have the same amount because they put away exactly the same. b) Ron, because he saved more each year. c) Molly, because she has put aside more money. d) Molly, because her money has grown for a longer time at compound interest. Question 18. If you have caused an accident, which type of automobile insurance would cover damage to your own car? a) Term b) Collision c) Comprehensive d) Liability Question 19. 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?
    Question 13. 4

    Matt will pay less because people who travel overseas are better risks. They will both pay the same because they have almost identical financial backgrounds. Eric will pay less because the car is collateral for the loan. They will both pay the same because the rate is set by law. Question 20. 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? a) A little more; about 20% more. b) A lot more; about 70% more. c) About 10 times as much. d) No more; I would make about the same either way.

    a) b) c) d)

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