FREE · NO ACCOUNT · TWELVE QUESTIONS

HOW MUCH OF THIS DO YOU ACTUALLY KNOW?

Compound interest, inflation, fees, debt, tax. The things that decide most people’s finances whether or not they ever place a trade — and almost none of it is taught at school. Every answer explains itself, right or wrong.

1. Compounding
You put £100 in an account paying 10% a year and leave it alone. After two years, roughly how much is there?
2. Inflation
Your savings pay 2% a year. Prices rise 4% a year. What is happening to what your money can buy?
3. Diversification
You own five companies. All five are banks. How diversified are you?
4. Fees
A fund charges 1% a year. On a balance held for thirty years, is that a small cost?
5. Credit
A credit card charges 22% a year. An investment returns 8% a year on average. Where does a spare £1,000 do most good?
6. Risk and return
Someone offers an investment with high returns and no risk of loss. What is the most likely explanation?
7. Emergency cash
Why hold cash you are not investing?
8. Tax
You sell at a loss in December and buy the same holding back a week later, to claim the loss. What happens?
9. Averages
A fund returned +50% one year and −50% the next. What happened to £100 invested at the start?
10. Borrowing to invest
Borrowing to invest multiplies your returns. What else does it multiply?
11. Where information comes from
Where can you read what a US public company is legally required to disclose?
12. Predictions
A well-known analyst says a recession will begin in six months. How much weight should that carry?

0 of 12 answered

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