Director Annamaria Lusardi and Professor Olivia S. Mitchell developed 3 questions that test an individual’s financial literacy. In their paper, “Financial Literacy Around the World: An Overview”, they found that the lack of financial literacy was a global problem, and that women consistently scored lower than men. In South Africa, roughly 4/10 of our adult population surveyed were considered financially literate.
Since April is financial literacy month, we’re conducting our own survey to see if our readers will perform any better.
*Please note that we’ve adapted some of the questions to suit the South African financial landscape.
1) “Suppose you had R100 in a savings account and the interest rate was 2% per year. After 5 years, how much do you think you would have in the account if you left the money to grow?”
A) More than R102
B) Exactly R102
C) Less than R102
D) Don’t know
E) Refuse to answer
2) “Imagine that the interest rate on your savings account was 4% per year and inflation was 6% per year. After 1 year, with the money in this account, would you be able to buy…”
A) More than today
B) Exactly the same as today
C) Less than today
D) Don’t know
E) Refuse to answer
3) “Do you think the following statement is true or false?
Buying a single company share usually provides a safer return than an equity unit trust fund.”
A) True
B) False
C) Don’t know
E) Refuse to answer
If you’re interested to know the results, please get in touch with us at info@wealthcreed.com