Americans Flunk in Basic Knowledge of Finance

Feb. 6 -- Americans got a report card today on their financial literacy and the average grade was an "F."

In a recent survey, Americans scored an average 42 percent on a 14-question test of basic knowledge of personal finances. For instance, two-thirds falsely believe there is "an organization that insures you against losing money in the stock market or as the result of investment fraud."

Another 45 percent falsely believe diversification is "a guarantee" investments will do well even if the stock market falls. And 63 percent do not understand the basic concept of inflation.