After my last post on interest rates, one of my readers said that although he though he understood the subject, he wished there was a way to test his understanding.
That got me thinking… a short quiz every now and then might be a great idea!
So here it is! The first ever Canadian Performer’s Money pop quiz. In the next post we will discuss the results.
I think the answer to number 4 is incorrect!
JMHO…
If a mutual fund charges an MER of 2%, they take 2% of the funds profits in fees every year, so the fund would have to do 2% better just to keep up. How do you see it?
I agree with that part. But I would substitute “assets”, for “profits”.
During 2008, when there were no profits, everything was down 40%, but they still got their 2%. This is what made me self manage. They always get paid, good times and bad!!!
Great point! I went in and made the change. I was trying to keep it simple, but that is too important a distinction not to correct. THE FUND MANAGER STILL GETS HIS FEES WHEN HE LOSES YOUR MONEY!.
I am just reading about hedge funds right now. They got 20% of the profit if the fund made money and if the fund lost money, they would just close the fund and start a new one. Heads they win, tails you lose!
It’s for this reason they made wild risky investments that threw the whole market off and ran up the price of the stocks they picked.
I did the quiz but when I went back I understood the error on the one about the dividends. The one about the $100 liability and $100 asset I chose to pay off the $100 liability as I figured it would make more sense to get rid of who you owe before you buy more especially if there is interest tacked on to that liability where the asset is the asset. So I scored 60%. Great idea
Mr.CBB
I made the quiz after your last comment. With question #5 either answer could be right depending on the circumstance and the current economy. The point was to make you think and realize (as you do) that paying off a debt is the same as buying and investment.
Hi Troy!
The quiz is an excellent idea (ha). I do like to see that I am learning so it’s a great tool for me at least. I like to know that what I am reading and understanding is correct. I look forward to more quizzes. Cheers Mr.CBB (maybe you can stick a quiz in the guest post?)
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