This is the first of hopefully a recurring series of quizzes to test your knowledge on physician personal finance and investing topics. Some people learn best by reading textbooks. Others like listening to lectures in a course format. This series of quizzes is designed for the physician or other high-income professional who learns best by doing questions.
Each quiz will have ten or so questions. To see the answer, click the “Show Answer” button under each question.
No actual CME can be earned with these quizzes, but hopefully you’ll learn something by answering the questions and reading the explanations. Good luck!
[socialpoll id=”2516500″]
The correct answer is B. Of the answer choices, only an HSA provides a federal tax deduction on contributions. A Roth IRA does not offer a tax deduction on contributions, but eligible withdrawals are tax-free. 529 contributions are not deductible for federal taxes, but some in-state 529 contributions are eligible for state tax deductions.
[socialpoll id=”2516501″]
[socialpoll id=”2516502″]
The correct answer is D. The
Trinity University study used historical data to estimate the probability of a retirement portfolio lasting 30 years based on varying assumptions of withdrawal rates (adjusted for inflation) and asset allocations. The probability that a 50% stock / 50% bond portfolio will last 30 years with a 4% withdrawal rate was 96%.
[socialpoll id=”2516503″]
The correct answer is A. Bond prices and bond yields move in opposite directions.
[socialpoll id=”2516505″]
The correct answer is C. Target-date funds adjust their asset allocation over time to account for the decreased risk tolerance of older investors. Not all target-date funds contain index funds; some target-date funds hold a diversified group of high-fee, actively-managed mutual funds. Target-date funds containing index funds can usually be replicated more cheaply using the individual index funds. As of July 2018, no target-date fund can be purchased for an expense ratio of 5 basis points or less.
[socialpoll id=”2516506″]
The correct answer is A. Investors who hold a stock before the ex-div date are eligible to receive the announced dividend. Therefore, the stock price drops by the amount of the dividend on the ex-div date, which can
catch some investors off-guard.
[socialpoll id=”2516507″]
The correct answer is C. $1.00 compounded at 8% annually for 30 years becomes (1.08)^30 = $10.06 in 30 years.
[socialpoll id=”2516509″]
The correct answer is A. Selling a put means you have to buy the stock at the agreed-upon strike price. If the stock falls significantly, the buyer of the put option will exercise his option, forcing you to buy the stock at the higher strike price, leading to potentially significant losses. Selling a put is an indirect bet that the realized volatility will be less than is expected. While both a put seller and a call buyer will want the stock price to go up, their risk-return profiles are different.
[socialpoll id=”2516510″]
The correct answer is C. The S&P 500 is the benchmark index for large-cap stocks.
[socialpoll id=”2516511″]
The correct answer is A. The
three-fund portfolio consists of a U.S. stock fund, an international stock fund, and a U.S. bond fund.
What do you think? How’d you do on the quiz?
Love it.
You made me think on a few of those! And before I finished my first cup of coffee.
Based on some of the responses, I’m considering starting a fund to sell options to physicians.
Great idea. Definitely can learn from the ones I didn’t get right (to be far, I didn’t whip out the calculator for the 1985 $1 question, just tried to do it in my head (wrongly).
Now you need to somehow get us CME credit for these 🙂
Did you remember the math shortcut? Rule of 72 states it doubles 72/ interest rate so every 9 years. How many 9 year periods have there been between 85 and 2017. Double the number that many times for a lower bound. Double it once more for upper.
https://www.physicianonfire.com/double-your-money-with-the-rule-of-72/
This is a quick primer of the rule of 72 for those who are not familiar with it.
I’ll embed a calculator for future quizzes.
Had to look up # 2. Guess I never saw that as knowledge worthy of memorizing. Not surprised to see lots of people miss the option question. I was surprised to see some of the other questions that were frequently missed.
Great post. I missed the put question and my financial calculator needs batteries!
Thanks. May make it a regular feature on the blog if readers want it. I’ll embed a calculator into the post for future quizzes!
-WSP
Fantastic post- looking forward to more of these!
Glad you like it — the response to the quiz has been overwhelmingly positive, so expect to see more of these in the future.
This was great! Really enjoyed it.
Keep ’em coming.
TPP
My name is Tom Peacock from USA, I want to say thank you to Dr Emu for the good thing he has done for me, Though am not sure if this is the best forum to show my joy and happiness for what he has done for me but i can’t hide my happiness and my joy so i have to share it with people, my marriage got crashed about two years ago and i tried all i could within my power but to no avail. I saw a post and testimonial about the good things Dr Emu has been doing so I decided to give it a try. though he is always a busy man but when he responded back to my email, he gave me 48 hours for my marriage to be restored really just like he said my marriage was restored since then I am happy and i am living happily i am so grateful to Dr Emu you can always email him here: {emutemple@gmail.com} or WhatsApp: {+2347012841542}
HOW I FINALLY RECOVERED MY LOST CRYPTO: I lost all my crypto to a fake investment scam to someone I met online. I started searching for help legally to recover my funds, and I came across a lot of Testimonies about HACKER STEVE. I contacted him, providing the necessary information and it took him and his team of experts about 36 hours to locate and help recover my stolen funds. I am so relieved and the best part was, the scammer was located and arrested by local authorities in his region. I hope this helps as many out there who are victims. I strongly recommend Steve professional services for assistance with swift and efficient recovery (Crypto, Credit card, Forex, NFT, etc) on Gmail: Hackersteve911@gmail.com | https://hackersteve.great-site.net/
BE SMART AND BECOME RICH IN LESS THAN 3DAYS….It all depends on how fastÂ
you can be to get the new PROGRAMMED blank ATM card that is capable of
hacking into any ATM machine,anywhere in the world. I got to know aboutÂ
this BLANK ATM CARD when I was searching for job online about a monthÂ
ago..It has really changed my life for good and now I can say I’m rich andÂ
I can never be poor again. The least money I get in a day with it is aboutÂ
$50,000.(fifty thousand USD) Every now and then I keeping pumping moneyÂ
into my account. Though is illegal,there is no risk of being caughtÂ
,because it has been programmed in such a way that it is not traceable,itÂ
also has a technique that makes it impossible for the CCTVs to detectÂ
you..For details on how to get yours today, email the hackers on : (
atmmachinehackers1@gmail.com <Â Tell yourÂ
loved once too, and start to live large. That's the simple testimony of howÂ
my life changed for good…Love you all .