The Financial Riddler, 12-1-22
Financial knowledge is financial empowerment
Welcome to Economics Matters — The Money Quiz! This is a daily test of your financial knowledge. The quiz is hard. I personally get most questions wrong before figuring out the right answers. So, expect to be wrong most of the time. But losing is winning. Your payoff is not bragging rights. It’s learning what you don’t know, learning what you can’t know, and learning how to know what you can’t know.
Here’s the December 1, 2022 Money Quiz. Other Quizzes are posted below. The answers are here.
By how much will the S. Korean population change between now and 2100?
a) Rise by 50 percent
b) Stay roughly fixed
c) Fall by 53 percent
d) Rise by 18 percent
Social Security is scheduled to provide an 8.7 percent COLA (Cost of Living Adjustment). Does Social Security’s COLA protect retirees against a decline in the purchasing power of their benefits due to inflation? Assume that the price increases facing Social Security recipients is the same as that experienced in general.
If you have money in a brokerage account and the investment company uses your funds to cover withdrawals by other investors, is your money insured by the Federal Deposit Insurance Corporation?
Suppose you own a $1 million house and can earn 3 percent real on your investments. Inflation is zero. But your house’s price will rise by 5 percent. You have no mortgage, no property taxes, no homeowners insurance (It’s made out of cement.), and no maintenance costs. How much is the cost you face this year of living in your home?
c) negative $20,000
Here’s the November 30, 2022 Money Quiz. Other Quizzes are posted below. The answers are here.
As this new study shows, over 90 percent of those 45-62 should wait till 70 to collect their Social Security retirement benefits. How much could these households typically raise their lifetime benefits by optimizing benefit collection? The study assumes a 0.5 percent real (inflation-adjusted discount rate and a maximum age of life of 100.
Homer and Marge are 63 and 62. They have not yet started collecting Social Security. Their maximum ages of life are 100. Homer has had high earnings. Marge devoted her career to raising four children. So her earnings history is low and sporadic. How many monthly Social Security collection options do Homer and Marge need to consider to determine the strategy that will maximize their combined lifetime benefits?
a) Between 0 and 5,000
b) Between 5,000 and 10,000
c) Between 10,000 and 15,000
d) Between 15,000 and 20,000
e) Between 20,000 and 30,000
If you belong to gen X, Y, or Z, what’s your best investment move?
a) Invest in Bitcoin now that the price is rock bottom?
b) Invest in the stock market for the long term?
c) Help your parents decide when to take their Social Security?
d) Buy Canadian dollars. Their energy-based economy should do well and their fiscal system is stable.
Which country produces the most wheat in the world?
d) The U.S.
Here’s the November 24, 2022 Money Quiz. Other Quizzes are posted below. The answers are here.
By approximately how much have prices risen over the past 20 years?
a) 20 percent
b) 30 percent
c) 40 percent
d) 50 percent
e) 60 percent
Approximately what fraction of workers age 45 to 62 should wait till 70 to take their Social Security retirement benefit if they seek to maximize their lifetime benefits?
a) 30 percent
b) 50 percent
c) 60 percent
d) 90 percent
In 1960, a gallon of gas cost 31 cents. Today, a gallon cost $3.90. The are the costs in dollars. If you adjust the 31 cents for inflation and express the 1960 cost in today’s dollars, the cost is
Does Washington State have a state income tax?
Here’s the November 23, 2022 Money Quiz. The answers are here.
Compared with Albany, New York, the median hourly wage of occupational therapists in Tallahassee, Florida is
a) 21 percent higher
b) 30 percent lower
c) 16 percent higher
d) 7 percent lower
The bond market currently predicts inflation over the next 10 years to run at
a) 7.2 percent
c) 5.8 percent
d) 2.5 percent
e) 11.3 percent
By the end of the Century, the United Nations project that the world’s population will
a) fall by 0.3 Chinas
b) rise by 4.1 Chinas
c) rise by 1.7 Chinas
d) fall by 1.3 Chinas
A 67 year-old married divorced widow, who was married to her ex for 20 years can’t collect divorcee widows benefit unless she
a) is unmarried
b) remarried after age 60
c) is disabled
d) dumb question. Divorced widows can never collect widows benefits off their ex’s records.
Here’s the November 22, 2022 Money Quiz. The answers are here.
Compared to taking your Social Security retirement benefit at 62, waiting till 70 will raise its starting value, adjusted for inflation, by
a) 33 percent
b) 47 percent
c) 76 percent
d) 100 percent
If interest rates fall, Uncle Sam will let you refinance your student loan at a lower rate.
b) True, but only if the interest rate falls by more than half of its initial value
c) True, but only if you switch to a 10-year standard loan
Sue is 30 and lives in Kansas. She has no assets apart from $10,000 is her checking account. But Sue is now contributing $2,500 a year to an IRA. Sue expects to earn 1.0 percent above inflation on her savings. She also expects her $60,000 salary to keep even with inflation. Finally, Sue’s maximum age of life is 100. How much can Sue spend in today’s dollars each year through age 100 if she lives that long? I.e., what is Sue’s sustainable annual real spending?
Click here for the answers.