Financial Smarts: Can You Beat These High School Investing Whizzes?

2025-06-03
Financial Smarts: Can You Beat These High School Investing Whizzes?
The Wall Street Journal

Think you're a personal finance guru? Put your knowledge to the test with a challenging quiz inspired by a recent national high school competition! We've compiled questions covering everything from Required Minimum Distributions (RMDs) and Certificates of Deposit (CDs) to the intricacies of stock trading. See how you stack up against the next generation of financial experts and learn something new along the way.

In today's complex financial landscape, understanding personal finance is more critical than ever. It’s not just about saving money; it's about making informed decisions about investments, retirement planning, and managing debt. And increasingly, younger generations are demonstrating a remarkable grasp of these concepts.

A recent national competition showcased the impressive financial acumen of high school students across the country. These bright minds tackled tough questions, demonstrating a depth of understanding that rivals many adults. Inspired by their performance, we’ve created a quiz to challenge your own financial knowledge.

The Quiz: Test Your Financial IQ

Here's a sample of the types of questions these high schoolers expertly answered. No peeking!

  1. What is a Required Minimum Distribution (RMD)?
    1. A mandatory contribution to a retirement account.
    2. The amount you must withdraw from your traditional IRA or 401(k) each year after a certain age.
    3. A government subsidy for retirement savings.
    4. A tax credit for early retirement.
  2. What is a Certificate of Deposit (CD)?
    1. A risky investment in a startup company.
    2. A type of bond issued by the government.
    3. A savings account that holds a fixed amount of money for a fixed period of time, and usually pays a fixed interest rate.
    4. A loan you can take out to purchase a car.
  3. Which of the following best describes 'diversification' in investing?
    1. Investing all your money in a single, high-growth stock.
    2. Spreading your investments across different asset classes to reduce risk.
    3. Buying and selling stocks rapidly to profit from short-term price fluctuations.
    4. Borrowing money to invest in real estate.
  4. What is the primary difference between a Roth IRA and a Traditional IRA?
    1. Roth IRAs offer tax deductions on contributions, while Traditional IRAs do not.
    2. Traditional IRAs offer tax deductions on contributions, while Roth IRAs do not.
    3. Roth IRAs are only for those under 30.
    4. Traditional IRAs are only for those over 50.

(Answers at the bottom of the page)

These questions represent just a small fraction of the financial knowledge these high schoolers possess. They understand the importance of compound interest, the risks associated with different investment strategies, and the long-term implications of their financial decisions.

Why is this important? Financial literacy isn't just for experts; it's a vital life skill for everyone. By understanding basic financial principles, you can make smarter choices that will benefit you throughout your life. Taking this quiz is a great first step towards boosting your financial IQ.

So, are you ready to challenge yourself? Take the quiz and see how you measure up! And remember, even if you don't ace it, you'll learn something new about the world of personal finance.

Answers: 1. B, 2. C, 3. B, 4. B

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