Posted on 11/19/2015 8:18:34 AM PST by SeekAndFind
A major survey on financial literacy has just been published, and the results are terrible.
McGraw Hill Financial (which owns S&P), the World Bank, and Gallup have produced the S&P Global Financial Literacy Survey, which attempted to get an idea of how financially literate the world is by polling 150,000 adults in more than 140 countries.
The group defined financial literacy as the ability to answer three of four really simple questions about inflation, risk, and interest. Take a look.
One of the easiest questions on the test is about interest. There is no compounding involved, and the numbers themselves aren't at all complicated. Here it is:
"Suppose you need to borrow 100 (country currency). Which is the lower amount to pay back: 105 (country currency) or 100 (country currency) plus 3%?"
It's a bit terrifying that only 49% of the people polled around the world could answer that
(Excerpt) Read more at businessinsider.com ...
Good thing they didn’t ask this question of U.S. congressmen and senators ... it would prove to be embarassing.
The Countries that routinely outscore the USA and rank in the top 5 in the standard International Math tests — South Korea, Japan, Taiwan and even China, rank LOWER in terms of financial literacy?
Hmmm....
The Countries that routinely outscore the USA and rank in the top 5 in the standard International Math tests — South Korea, Japan, Taiwan and even China, rank LOWER in terms of financial literacy?
Hmmm....
I’m sure a lot of them scratched their heads and asked, “what’s that circle dealie with the line separating them?”
OK....I’m stumped.. What’s the answer? /s
I gauge peoples financial literacy by asking if they would pay more for a high yield corporate bond or a low yield corporate bond.
The lower amount is plus 3%, which is 103. Is there a trick to this that I am missing?
Congressmen and Senators would borrow another $200 payback the loan and keep the difference.
This isn’t such an easy question.
Is the interest tax deductible?
What is the term of the loan?
What is the inflation rate?
Are they using the traditional definition of percentage, or the one that the US government uses?
I suppose someone could over complicate it and say that they did not know the term of the loan, and 3% charged annually would be more on a long term loan. ??
How do you suppose they would answer this question? Did the people in western capitalist countries get wealthy by working hard and efficiently creating goods and services that other people want or did they get wealthy by stealing resources from people in poor countries? How would Bernie Sanders answer that question.
Even if you don't know the answer, how do you get to 16%? Random guessing would lead you to the global average of 49%. The only way to get 16% is if your population is financially illiterate AND really unlucky.
Given there are only two possible answers a totally random sample of monkeys would result in 50% being correct.
Hard this say because I did not see a time frame
my be some dome want a hi or low yield corp and don’t care
Ha... Too clever by half
That is racist, the entire English speaking world is financial literate (accept India). How dare you post that.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.