Smithtown

School of Business

FINANCIAL LITERACY DAY

Tuesday, March 2^nd

 Thanks to our business partners who have made this day a big success!

MONEY 101:

DO YOU KNOW THE ANSWERS TO THESE QUESTIONS?

1.      The Rule of 72 states that:

1. The money you need to retire is approximately 72 times your annual income.
2. The time it will take for your money to double is 72 divided by a given interest rate.
3. If you save only 5 percent of your income a year, the earliest you can retire is at age 72.
4. Accounts must retire by age 72

2.     Asset allocation is:

1. Holdings allocated to types of different accounts.
2. The separation of accounts by types of assets.
3. The apportioning of investment funds among categories of assets, such as cash, equities, stocks and bonds.
4. Types of investment funds.

3.      To qualify for a mortgage loan, the total of your monthly debt payments (including the mortgage payment) should never exceed what percentage of your gross monthly income?

1. 15 percent
2. 25 percent
3. 30 percent
4. 40 percent

4.      After certain deductions and gifts to your spouse, what is the maximum the federal government allows you to bequeath to your heirs tax-free?

1. $300,000
2. $625,000
3. $1 million
4. $1.5 million

5.      If you save $2000 a year from age 22 to 30, and your brother saves $2000 a year from age 30 to 65, assuming a 10% annual rate of return, who will be wealthier at age 65?

1. your brother
2. you

6.      If you lose your job, it is a good idea to have a minimum of how many months’ living expenses.

1. one to three
2. three to six
3. one year
4. that will never happen to me

7.      When you short sell your loss could be:

1. limited to your investment
2. unlimited

8.      Credit card interest rates usually range from

1. 5%-8%
2. 16%-18%
3. 30%-34%

9.      A form of financial aid that must be paid back with interest is a:

1. loan
2. grant
3. federal aid

10.   A cyclical stock parallels:

1. the economy
2. nothing
3. the rise and fall of inflation
4. similar quarters of the year

PARENTS:

We encourage your children to take one or more of the following School of Business courses in order to raise their level of financial literacy.  Everyone needs to know how to handle their money! 

“NEW” Money 101:  Introduction to Financial Literacy - Checking and savings accounts, credit, debt, loans. 

Wall Street I:  Introduction to investments, stock market, mutual funds and 401K plans.