Less than half of the world's population can answer this incredibly simple financial question

Business Insider ^ | 11/19/2015 | Mike Bird

[Bloody Sam Roberts]

I gauge peoples financial literacy by asking if they would pay more for a high yield corporate bond or a low yield corporate bond.

They'd have to be able to assess their own acceptable level of default risk before answering that. Which...kind of proves your point.

[Bloody Sam Roberts]

"what's that circle dealie with the line separating them?"

That's the symbol that N.O.W. uses to represent the emasculation of American males.

[Billthedrill]

Well, I got some awesome rates on these here Greek municipal bonds. What could possibly go wrong?

[BitWielder1]

Let Common Core run its course and we'll match the rest of the world.

[liberalh8ter]

I'd like to see the numbers on this test after its administered in D.C.

[ProtectOurFreedom]

Yes. They didn't specify which "(country currency)." It makes a huge difference if you don't have all the required information to solve a problem.

jk

[muir_redwoods]

the question isn’t which they would buy but simply what the price would be

[CodeToad]

Sad that the author considers a percentage question not a math question but a “financial” question.

[svcw]

The questions are so poorly written, it’s amazing anyone could answer anything.

[CGASMIA68]

Wise Ass I read the article,passed too;
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.

[Magnum44]

I left off the sarc tag...but thanks for the input...

[CGASMIA68]

thanks for your positive help

[Bloody Sam Roberts]

What could possibly go wrong?

Heehee....If I didn't know you forgot the sarcasm tag, I'd have to say, "We need to talk."

[Magnum44]

Actually, as pointed out, the “country currency” is very important. If the country’s inflation rate is 10000% like Brazil back in the late 80’s or many other places since, take the hundred now and spend it immediately. When the debt is due it will be pennies regardless of the answer to the question. :)

[Uncle Miltie]

Gee: That’s almost an IQ test .....................................................................................................

[ProtectOurFreedom]

For an instantaneous transaction, it doesn’t make any difference. 105 is always bigger than 103. That was the very simple problem posed — without any time consideration.

In the real world of currency contracts or simply deciding how many of your dollars to convert to a foreign currency every day while traveling, you are correct.

My very first foreign assignment in the mid-70s was in Brazil. The exchange rate was posted in the Rio hotel lobby on a chalkboard every morning. During their hyperinflation, I learned to convert as few dollars as possible. An excellent introduction to exchange risk at a young age.

[Exit148]

I am NOT a numbers person. My mind gets dizzy when faced with them. But I decided to read the question -— and got it right immediately. If I can do it — anyone can -— should!

[Pearls Before Swine]

Well, in a large portion of the world, interest is “haram.”

[monocle]

The question dealt with inflation. My point the correct answer would differ from country to country depending upon what kind of tax regime each country had.

[samtheman]

Krugman won’t just get the answers wrong, he’ll justify them.