The Financial Health Test

1. Hi! And welcome to the Pink Investments financial health test. Dont be afraid to find out just how bad your financial health is. Even if your score is low, we can point you in the right direction to financial wealth and wellbeing. 

2. 1

   Compound interest is:

   Interest you earn on an investment that also earns interest

   The cost of borrowing money

   Interest paid annually            

5. 2

   Your child's school fees are due! Which is your most liquid investment, i.e., the easiest to convert to cash?

   Government bonds

   Term Deposit Account

   Money market account 

6. 3

   You've just sold 1000 shares for a profit. You owned the shares for 9 months. At tax time, you will pay which tax on this sale:

   Income tax

   Capital gains tax

   Inheritance tax

7. 4

   Dollar cost averaging is:

   Investing the same amount of money at regular intervals regardless of the price of shares

   An investment strategy that allows you to buy at the average price of a stock for a particular month

   Taking the average of your expenses each month to determine your dollar's buying power 

8. 5

   Which of the following investment strategies is best for achieving long term investment goals?

   Putting your money in conservative investments

   Diversification

   Buying low, selling high 

9. 6

   You're interested in saving for the long term. You select a Super fund over a Unit trust because:

   The charges are lower on the fund.

   You get a  tax deduction on the amount saved

   When you withdraw the money after age 60  you will be taxed only income tax.

10. 

11. 7

    You've found a great no-load managed fund. This is preferable to a load fund because you'll save on:

    Commission to the fund company

    Taxes at year end

    The annual fee for the fund's marketing costs 

12. 8

    Your best friend asks you what an index fund is. You tell her its a fund that:

    Offers instant diversification by purchasing all the stocks in a particular index

    Is only indexed against the European funds to measure performance

    Is comprised of one share of each of the stocks on all of the stock indexes      

13. 9

    An example of a fixed income investment is: 

     

    A stock managed fund 

    A stock

    A bond

14. 10

    You are in your 20s or 30s and the stock market crashes making your retirement investments worth 50 percent of what they were worth yesterday.

    Do you:

    Sell half of your investments, and hope the other half will return to profit soon

    Dont  worry and sell nothing

    Sell everything!

Go!