Copied from the surveys findings report, *’s around the correct answers.
THE SURVEY ASKED FIVE QUESTIONSON FOUR TOPICS (bold denotes correct answer)Standard & Poor’s Ratings Services and McGraw Hill Financialare committed to creating stronger financial markets aroundthe world. We believe there are correlations between financialliteracy, financial access and the strength of markets. Address-ing financial literacy is a key strategy in building stronger, moreaccessible and sustainable markets around the world.
RISK DIVERSIFICATION
Suppose you have some money. Is it safer to put your moneyinto one business or investment, or to put your moneyinto multiple businesses or investments? [one business orinvestment; *multiple businesses or investments*; don’tknow; refused to answer]
INFLATION
Suppose over the next 10 years the prices of the things youbuy double. If your income ALSO doubles, will you be ableto buy less than you can buy today, the same as you can buytoday, OR more than you can buy today? [less; *the same*;more; don’t know; refused to answer]
INTEREST
Suppose you need to borrow $100. Which is the lower amount to pay back: $105 or $100 plus three percent? [105US dollars; *100 US dollars plus three percent*; don’t know; refused to answer]
COMPOUND INTEREST
Suppose you put money in the bank for two years and the bankagrees to add 15 percent per year to your account. Will thebank add MORE money to your account the second year thanit did the first year, or will it add the same amount of money both years? [*more*; the same; don’t know; refused to answer]
COMPOUND INTEREST
Suppose you had $100 in a savings account and the bankadds 10 percent per year to the account. How much moneywould you have in the account after five years if you didnot remove any money from the account? [*more than 150dollars*; exactly 150 dollars; less than 150 dollars; don’tknow; refused to answer]â€
I’m not sure how much of this is finance, and how much of it is just not knowing or understanding basic math concepts, or how to solve a problem that requires a bit of thought.
I wonder how many of the people asked have some simple, mundane job that doesn’t require them to think. Or if their eyes glaze over at the thought of finances or math. And the percentage thing - that might be a pretty complex idea that I imagine a lot of people in the world have never learned, where how much different something is thought of as a bit more, some more, a lot more, etc.
I wonder if you asked some guy out in the field the same questions worded differently?
If the bean plants double in number in 5 years, but your family can pick them twice as fast in 5 years - will you still be able to harvest all of the beans?
(Don’t ask me though. I’m no farmer!)