This interesting test of Financial Literacy comes from the Wall Street Journal.
They ask: Are you—or your spouse or your teen or your parents—among the financially illiterate?
Find out by answering these three questions which are based on a quiz that two US University professors have been using for years to assess individuals’ basic financial literacy level!
1. Suppose you had €100 in a savings account and the interest rate was 2% per year. After five years, how much do you think you would have in the account if you left the money to grow?
- A. More than €102
- B. Exactly €102
- C. Less than €102
2. Imagine that the interest rate on your savings account was 1% per year and inflation was 2% per year. After one year, how much would you be able to buy with the money in this account?
- A. More than today
- B. Exactly the same
- C. Less than today
3. Please tell me whether this statement is true or false: “Buying a single company’s stock usually provides a safer return than a stock mutual fund.”
Read the full story here
In a survey of Americans over the age of 50, only half could answer the first two of the above questions correctly. Only one-third got all three right.
The correct answers are shown below.
How did you get on?
Correct Answers: A – C – False