The average consumer answered just 4 out of 10 questions correctly on a recent investing quiz from MagnifyMoney that asked 1,025 American adults about topics from dividends to the meaning of a price-to-earnings ratio.
Younger generations performed more poorly on the quiz compared to older generations, with both millennials and Gen Z averaging scores under 40%. Investing knowledge can be particularly beneficial for younger adults: They can take greater advantage of compound interest, which Albert Einstein supposedly called “the most powerful force in the universe” because of the way it can help your money grow over time.
Of those surveyed, only 30% knew what compound interest is and how it’s calculated.
More from Grow:
3 tips for making smart choices when picking investments
How these 1,300 self-made millionaires think about money
She paid off $30,000 in 11 months thanks to 3 money moves
We recreated MagnifyMoney’s quiz so you can see how much you know about basic investing concepts, and where you may need to fill in some gaps. If you don’t know all the answers, don’t fret. We’ll give you resources to help you learn. And if you have a money question you’d like for us to address, email us at firstname.lastname@example.org, so that we can answer it in a future article.