2 in 5 Canadians failed the general investment knowledge test

The Canadian Securities Administrators (CSA) on October 16, 2012 released the 2012 CSA Investor Index, the third survey on investment knowledge, investor behaviour and incidence of investment fraud among Canadians. The previous two surveys were conducted in 2006 and 2009. Key findings this year show that the overall investment knowledge of Canadians is low, with 40 per cent of Canadians failing a general investment knowledge test answering fewer than 4 out of 7 questions correctly. The most common question answered incorrectly was, “What is compound interest?” It’s an investment term we hear often, but what does it mean…exactly. Investopedia.com defines compound interest as: frequently interest added to the principal, the faster the principal grows and the higher the compound interest will be.  Still confused? Watch this video for a great explanation: Compound interest video There now you understand compound interest and why it’s important when investing. Stayed tuned for more posts on need-to-know investing terms. Remember, the more you know about investing the better you invest. Share & Bookmark This Story! Bookmark on Delicious StumbleUpon Google BookmarksTip’d

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