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Less than half of the world's population can answer this incredibly simple financial question
Business Insider ^ | 11/19/2015 | Mike Bird

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 ...


TOPICS: Business/Economy; Education; Society
KEYWORDS: finance; question
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To: muir_redwoods
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.

41 posted on 11/19/2015 9:13:30 AM PST by Bloody Sam Roberts (Democracy is not freedom. Democracy is simply majoritarianism. It is incompatible with real freedom.)
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To: fwdude
"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.

42 posted on 11/19/2015 9:14:55 AM PST by Bloody Sam Roberts (Democracy is not freedom. Democracy is simply majoritarianism. It is incompatible with real freedom.)
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To: Bloody Sam Roberts

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


43 posted on 11/19/2015 9:16:30 AM PST by Billthedrill
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To: SeekAndFind
Let Common Core run its course and we'll match the rest of the world.

44 posted on 11/19/2015 9:17:21 AM PST by BitWielder1 (I'd rather have Unequal Wealth than Equal Poverty.)
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To: SeekAndFind
I'd like to see the numbers on this test after its administered in D.C.
45 posted on 11/19/2015 9:17:37 AM PST by liberalh8ter (The only difference between flash mob 'urban yutes' and U.S. politicians is the hoodies.)
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To: The Ghost of FReepers Past
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

46 posted on 11/19/2015 9:18:47 AM PST by ProtectOurFreedom (For those who understand, no explanation is needed. For those who do not, no explanation is possible)
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To: Bloody Sam Roberts

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


47 posted on 11/19/2015 9:18:58 AM PST by muir_redwoods (Freedom isn't free, liberty isn't liberal and you'll never find anything Right on the Left)
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To: SeekAndFind

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


48 posted on 11/19/2015 9:20:38 AM PST by CodeToad (Stupid kills, but not nearly enough!)
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To: The Ghost of FReepers Past

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


49 posted on 11/19/2015 9:21:20 AM PST by svcw (Not 'hope and change' but 'dopes in chains')
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To: SeekAndFind

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.


50 posted on 11/19/2015 9:21:58 AM PST by CGASMIA68
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To: ek_hornbeck

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


51 posted on 11/19/2015 9:22:13 AM PST by Magnum44 (I dissent)
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To: TomGuy

thanks for your positive help


52 posted on 11/19/2015 9:22:31 AM PST by CGASMIA68
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To: Billthedrill
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."

53 posted on 11/19/2015 9:25:07 AM PST by Bloody Sam Roberts (Democracy is not freedom. Democracy is simply majoritarianism. It is incompatible with real freedom.)
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To: ProtectOurFreedom; The Ghost of FReepers Past

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. :)


54 posted on 11/19/2015 9:28:01 AM PST by Magnum44 (I dissent)
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To: SeekAndFind

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


55 posted on 11/19/2015 9:33:51 AM PST by Uncle Miltie (islam is a totalitarian death cult founded by a child rapist.)
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To: Magnum44

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.


56 posted on 11/19/2015 9:35:06 AM PST by ProtectOurFreedom (For those who understand, no explanation is needed. For those who do not, no explanation is possible)
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To: SeekAndFind

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!


57 posted on 11/19/2015 9:37:37 AM PST by Exit148 ((Loose Chnge Club founder) Put yours aside for the next Freepathon!)
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To: SeekAndFind

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


58 posted on 11/19/2015 9:40:57 AM PST by Pearls Before Swine
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To: SeekAndFind

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.


59 posted on 11/19/2015 9:46:25 AM PST by monocle
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To: SeekAndFind

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


60 posted on 11/19/2015 9:55:45 AM PST by samtheman (I will build a great, great wall on our southern border... - DT)
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