It was a bad year for financial markets. It was an excellent year for financial drama.
From surging inflation and collapsing crypto exchanges to the “moron premium” and misbehaving gazillionaires, 2022 dented portfolios and shattered assumptions.
How closely did you follow the people and forces that shaped this dramatic, painful, farcical period? Take this quiz to find out. If nothing else, the answers will remind you of how extraordinary the past year has been.
1 International bond markets shuddered in October as they reacted to the “moron premium.” What was that premium?
a. The higher yields that financial institutions suddenly demanded on loans for cryptocurrency.
b. The sudden bump in borrowing costs for Tesla and other electric-vehicle makers after Elon Musk’s US$44-billion purchase of Twitter.
c. The extra amount Britain had to pay to borrow after Liz Truss briefly took over as prime minister and unveiled bold new spending plans.
2 Things weren’t so great closer to home, either. Considering the total impact of falling stock and bond markets, wavering home prices and inflation, how much of Canadian households’ real net wealth went up in smoke between January and October, according to National Bank Financial?
a. 2 per cent.
b. 6 per cent.
c. 11 per cent.
3 To be sure, distress is all relative. Russian business leaders have suffered an unusual flurry of health problems during the year. How many prominent Russian executives and entrepreneurs have died abruptly since January through suicide, falls from windows and other unusual events?
a. Six or fewer.
b. 10 or so.
c. At least 14.
4 From Russia’s war on Ukraine to global inflation to the still mounting toll of COVID-19, worrywarts had plenty to fret about in 2022. Economic historian Adam Tooze uses a vivid term for this sense of being in deep doodoo wherever we turn. He calls it:
a. The polycrisis.
b. The great unravelling.
5 Another word that surged in popularity during 2022 was “metaverse” – a catch-all term for the technology that may one day allow us to play, shop and attend meetings, all in one big immersive virtual reality. Right now, though, what is a stubborn challenge standing in the way of this geeky paradise?
a. The European Union’s restrictions on use of facial recognition software.
b. The possibility of criminals stealing your online representation, or avatar.
c. The difficulty in creating realistic-looking virtual legs for avatars.
6 Back here in the real world, the year proved to be a challenge for investors. Which of the following stock markets performed best in 2022 in Canadian dollar terms?
a. Brazil’s Ibovespa index.
b. Britain’s FTSE 100 Index.
c. Canada’s S&P/TSX Composite.
d. China’s 300 index.
e. The United States’ Nasdaq Composite.
7 Every major money manager seemed to start 2022 by paying lip service to the idea of ethical investing. The problem was defining what ethical meant. Consider, for instance, the S&P 500 ESG Index, which tracks stocks that meet stringent environmental, social and governance criteria. In April, its overseers decided to:
a. Kick out electric-vehicle maker Tesla Inc.
b. Add fossil fuel producer Marathon Oil Corp.
c. Both of the above.
d. Neither of the above.
8 Fortunately, everyone could agree on the need to move away from coal, the world’s largest single source of carbon dioxide emissions. What happened with global coal use in 2022, according to the International Energy Agency?
a. It sunk 10 per cent.
b. It dipped marginally, by roughly 2 per cent.
c. It increased 1.2 per cent, reaching a record peak.
9 The failure of giant cryptocurrency exchange FTX in November put an exclamation mark on crypto’s horrible year. Sam Bankman-Fried, the now disgraced founder of FTX, gained fame early in his career for harvesting the “kimchi premium.” That was:
a. The difference in prices for cryptocurrency traded on South Korean exchanges compared to elsewhere.
b. The higher stock-trading fees paid by Asian investors.
c. The seasonal variations in prices for fermented cabbage on the futures exchange in Seoul.
10 Mr. Bankman-Fried appears to have misplaced a few billion dollars in client funds. This may not be a complete surprise given that he and fellow FTX executives used to approve company expenses by:
a. Playing beer pong to decide who would pick up the bills that month.
b. Using personalized emojis in a group chat.
c. Issuing new crypto to cover the tab.
11 Some of Canada’s largest institutional investors bought into the crypto mystique with gusto. How much did Ontario Teachers’ Pension Plan lose on its investment in Mr. Bankman-Fried’s FTX?
12 As painful as Teachers’ loss was, it pales in comparison to the US$150-million that another prominent Canadian institution lost earlier in the year on its investment in crypto lender Celsius Network LLC. The losing investor in this case was:
a. Canada Pension Plan Investment Board.
b. Alberta Heritage Savings Trust Fund.
c. Caisse de dépôt et placement du Québec.
d. Royal Bank of Canada.
13 Inflation was on everyone’s mind this year, although there were striking disagreements on how best to measure it. How many different gauges of consumer inflation does the Bank of Canada offer on its home page?
14 Besides inflation, there was “shrinkflation.” This refers to:
a. A big increase in psychiatrists’ billing rates as a result of growing stress-related illness among remote workers.
b. A sneaky move by manufacturers to quietly reduce the size an item without reducing its cost.
c. The determined effort by some central bankers and employers to play down the corrosive impact of inflation on workers’ incomes.
15 Canadian home prices wavered in 2022, according to the Teranet National Composite House Price Index. Between January and November (the most recent reading available), how did the house price index perform?
a. It lost 9.8 per cent.
b. It lost 3.5 per cent.
c. It gained 1.1 per cent.
16 Many things did not work as planned in 2022 – including the phone system. A countrywide outage across Rogers Communications’ network in July:
a. Interrupted cellphone service for millions of customers.
b. Shut down the Interac payment system.
c. Resulted in the postponement of a concert by The Weeknd.
d. All of the above.
17 Beyond Meat, the plant-based-meat pioneer, also faced its challenges in 2022. Sales of its fake burgers slid. So did its stock price. The company’s lowest point, though, may have come in September when its chief operating officer was arrested for:
a. Allegedly passing off fake pork chops as real.
b. Threatening in an interview to take beef producers “to the slaughterhouse.”
c. Streaking at a university football game.
d. Allegedly biting a man’s nose in a road-rage incident.
18 He has many rivals for the title, but Elon Musk is our nominee for biggest screw-up of the year. From his shambolic makeover of Twitter to Tesla’s imploding stock price, the gazillionaire suffered one setback after another – including losing his title as the world’s richest person. Who is the new holder of that title?
a. Jeff Bezos, founder of Amazon.com.
b. Bernard Arnault, chairman of luxury goods maker LVMH.
c. Françoise Bettencourt Meyers, heiress to the L’Oréal beauty empire.
d. Gautam Adani, chairman of Adani Group, an Indian industrial conglomerate.
19 Advances in artificial intelligence throughout 2022 sparked unsettling questions about whether machines are on the verge of overtaking humans. In one striking case, a Google engineer claimed an AI program developed by his employer had:
a. Learned how to write original software.
b. Embezzled his bank account.
c. Achieved a level of sentience similar to that of a seven-year-old child.
20 Fortunately, AI still can’t write decent lyrics. Leonard Cohen, the greatest of all Canadian songwriters (no arguing, please!), still stirs emotions – and opens wallets – six years after his death. Who acquired his song catalogue this year?
a. Canada Pension Plan Investment Board.
b. Investment manager Blackstone Inc.
c. Bill Gates.
How well did you do?
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Do you have room for one more money-related quiz this holiday season? Try John Heinzl’s year-end test of personal finance knowledge.