Smart Money

Financial Literacy Guide: Do you like risk?

By Bankrate.com
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  • 2 min read

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What’s your money personality? Take our test and find out where you rank in the investment world.

The way we’ll do that is to help you figure out your risk tolerance — one of the best measures in seeing who you are as an investor. Risk is defined as the probability of loss. Do you like to take risks?? Are you generally conservative??Do you even know??Some people easily take risks in certain aspects of their lives, but when it comes to their money, it’s a whole new ballgame.

So let’s play ball. Take this quiz, add up your totals and you should have a good idea of the type of investor you will be.

  1. You just won $10,000 in the lottery. Congratulations! What do you do?

    You run out to the nearest casino, sit down at the blackjack table and try to double your money.

    You speak to your father’s stock broker and decide to invest it in the stock market.

    You put it under your mattress, or in a nice, safe certificate of deposit.

  2. You are sitting at the blackjack table at Trump’s Taj Mahal casino. You have been gambling. You started with $10,000, but you have lost $4,000 so far. How much more are your prepared to lose to win the $4,000 back?

    Nothing. You quit now and go home with $6,000 in your pocket.

    $2,000

    More than $4,000

  3. You decide that gambling is not the way to go. You want to get some advice on what to do with your money, so you …

    Read as much as you can, watch the news, and invest based on your research.

    Ask the blackjack dealer from the table you just got up from.

    Seek out the advice of a stock broker.

  4. You have finally decided to invest the money. You invest in …

    Blue chip stocks.

    A U.S. Treasury bill.

    A high-tech computer company.

  5. You are now a stock market junkie, and you are watching your new investment. You believe …

    That the value of your investment will increase.

    That the value of your investment will decrease.

    Equally that the value of your investment will increase or decrease.

  6. You wake up this morning and hear the market went down 2,000 points (Arrgh!!!). What do you do?

    Invest more because prices are lower — if it was a good buy at the original price it is even better now.

    Wait for the market to return to its previous level and leave your investment alone.

    Sell everything, put the remaining money in a savings account, and sleep soundly.

  7. Well, with all of this excitement, you realize you’re enjoying this stock market ”thing,” so you decide to ride out the storm. How long do you expect it will take for your investment to double?

    One year

    Three years

    Five years

  8. Believe it or not, your stock is not affected by the decline in the market, and one month later, the value of your stock is up 50 percent. You have no information on why this is happening, but you decide to…

    Buy more.

    Sit tight and hold on to your original position.

    Sell it, put the money into your savings account and call it a day.

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