By: Andrew Rosen, CFP®, CEP®

Have you woken up from that nightmare yet? You know, the one where you can’t get into your school locker? I do apologize if my last blog left you in suspense. Hopefully, you have a friend or two who took the quiz as well. Go ahead, be competitive, compare scores!

Okay, I’ll get on with it already. I’ll now reveal the 11 answers, so you can score yourself and see if you passed.

The Answers:

1.What is larger the U.S. Stock Market or the U.S. Bond Market?

A. Stock Market

B. Bond Market

Answer: B

The U.S. Bond market is substantially larger. I know this one throws people off, as it’s much less discussed than the stock market. The U.S. Bond market is approximately $40 trillion in value, while the U.S. stock market is only about $20 trillion. The trend holds true globally, too. There is estimated to be over $100 trillion of global bonds compared to $64 trillion of global stocks.

2. The Dow Jones Industrial Average has how many stocks in it?

A. 10

B. 20

C. 30

D. 100

E. 500

Answer: C

The Dow Jones Industrial average is comprised of only 30 stocks. Can you believe that? That means when the world is in a tizzy about the “markets” being down 500 points, they are really only referring to 30 stocks. Don’t get me wrong, those 30 stocks are some of the largest by market capitalization; however, they still only make-up a small portion of total stocks.

3. What is the largest market cap stock in the world?

A. Microsoft

B. Exxon

C. Amazon

D. Apple

E. Alphabet

Answer: A

That’s right. Bill Gates founded Microsoft and it’s still the titan of them all. There were moments where both Apple and Amazon eclipsed the 1 trillion dollar mark, but they are still not on top. As of now MSFT has a total market cap of 994.4 billion dollars. Not too shabby, right?

4. If you were getting 8% rate of return on an investment of $75,000 over 5 years, which answer would be the largest by the end?

A. One investment of $75,000 earning 8%

B. Three investments of $25,000 earning 8%

C. Five investments of $15,000 earning 8%

D. All equal the same amount

Answer: D

This one always throws people for a loop. I often see people suggest their accounts grow quicker if it’s all in one bucket. The reality may seem like it doesn’t grow as fast, but mathematically it does. Think about it–10% rate of return on $100 is $10. A 10% rate of return on two sets of $50 is $5 + $5, which equals $10. Now, if only I can get my 7 year old daughter to understand this!

5. Since the beginning of U.S. stock market data in 1872, U.S. stocks on a total return basis have been negative how many of those 147 years?

A. 10

B. 73

C. 54

D. 39

E. 20

Answer: D

It seems like it should be more, right? But, the facts though are the facts. The U.S. stock market certainly has its down years (39 to be exact). The surprising thing is it really only happens about 26.5% of the time, or 1 in 4 years. This hopefully gives you confidence to know that stocks may not be as “risky” as we think. The key is to know you have almost a century and a half of hard data on your side.

6. Today, the average sales price of homes in the U.S. is approx. $392,900. What was the average sales price in 1987?

A. $78,000

B. $105,000

C. $185,000

D. $133,500

E. $1

Answer: D

Did anyone answer E?  I know the 80’s seems like a lifetime ago. Although one of my favorite TV shows, The Goldbergs, brings me back almost every week, but house prices weren’t quite $1 back then. An average house a little over 30 years ago was approx. $133,500. Compare that to 2018, where the average house price was $383,500. Here is the crazier question, do you know what mortgage rates were like in 1987? The average mortgage rate was 10.28% that year. Can you imagine paying that today?

7. The first company listed on the NYSE was?

A. General Electric

B. DuPont

C. Bank of New York

D. Google

E. Lloyd’s

Answer: C

Guess it is no surprise that the Bank of New York was the first company traded on the New York Stock Exchange. Can you guess the year? Would you believe it was in 1792? I don’t think they were using E*Trade to put their trades through at that time. I’m guessing it was more quill pens, ink wells, and the horse and buggy.

Financial Pop Quiz

8. Who is the largest printer of money in the world?

A. United States

B. Germany

C. China

D. India

E. Monopoly

Answer: E

I’m joking, right? Sadly, no. There is actually more Monopoly money printed than real money each and every year. Parker Brothers report printing over $30 billion each year in Monopoly money. That buys a lot of Boardwalks and Park Places. Being from Atlantic City, I always loved Monopoly. This, however, gives me a whole new respect for the game.

9. The average lifespan of a $1 bill is?

A. 54 years

B. 18.1 years

C. 9.4 years

D. 5.8 years

E. 2.1 years

Answer: D

A good ol’George Washington is typically only around about five and a half years. This is longer than the average $5 bill at 5.5 years and $10 bill at 4.5 years. The longest life span? You guessed it, the $100 bill. Old Benjamin Franklin sticks around for on average about 15 years. Guess I’m not the only one who hates parting with these!

10. If you invested $1,000 in Amazon in 1997 when it went public, approximately how much money would that have grown to today?

A. $5,013

B. $1,341,000

C. $523,000

D. $1,000,000

E. $8,675,309

Answer: B

No wonder Jeff Bezos is a very wealthy man. Who would have thought a guy selling used books out of his garage would have one of the largest companies in the world? I don’t blame you if you asked Alexa for the answer to this one. (I wonder if she could help me build a time machine so I could have invested all my Bar Mitzvah money in Amazon in 1997?)

Extra Credit!

11. Extra Credit! In a room of seventy-five people what is the probability that two people share a birthday?

A. 5%

B. 25%

C. 50%

D. 75%

E. 99.9%

Answer: E

There isn’t enough room here for me to try to explain this one, but it’s true. It’s a famous math question called the birthday paradox. Think about it next time you are in a crowded room. There will be two people there who share a birthday. Here is one better–in a room of 23 people there is a 50-50 chance that two people share the same birthday! Mind blown.

The Tally!

Now be honest, how many did you get right? If you scored a perfect 100%, consider yourself a financial Ninja and give yourself a big pat on the back. A score of 8 or higher will still get you an A. If you scored 5-7, don’t feel too bad. These were tricky questions. That’s why you have a finance guy like me around.

I hope you all enjoyed this quiz. I think all these stats are really interesting. I’d love to know which was your favorite. So, Let’s chat over a beer or a glass of wine and peruse the land of financial trivia together.

Andrew Rosen

In his role as Financial Planner, Andrew forges lifelong relationships with clients. He coaches them through all stages of life and guides them to better achieve their life goals. For more information about Andrew or the other firm partners, Kyle Hill and David Levy, click the link below.

Find out more about Andrew Rosen, CFP®, CEP®
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Find out more about David Levy, CFP®