Majority of U.S. Investors Fail Finra’s Investing Quiz
December 17, 2019 by Alex Padalka
Americans with non-retirement investment accounts are for the most part unaware of main investing concepts, and many have little idea of the fees they’re paying, according to a new report.
Two-thirds of U.S. adults with taxable investment accounts incorrectly answered more than half of the questions on a 10-question investor knowledge quiz put out by Finra, the industry’s self-regulator says.
The questions ranged from basic attributes of stocks and bonds to the connection between risk and returns and the basics of trading on margin and short-selling. Forty-six percent of respondents, for example, believe that past performance is a good indicator of future results and only 30% understand that the benefits of index funds over actively managed funds are their generally lower fees, according to a survey of around 2,000 U.S. adults who said that they have investments in retirement accounts, such as 401(k)s and IRAs, and most of whom also have non-retirement accounts, according to Finra.
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