Test Your Financial Knowledge With This Simple 3-Question Quiz
Pop Quiz Hot Shot: Can you answer these three questions that baffle most college-educated Americans?
The test was developed by two business school professors, Olivia Mitchell of Wharton and George Washington’s Annamaria Lusardi School. They surveyed an American to learn more about wealth inequality using this test designed to test basic knowledge about money.
Here are the questions, and the general ones are for money:
- Let’s say you have $ 100 in your savings account and the interest rate was 2% per year. In five years, how much do you think you would be in the account if you left money to grow? (A) More than $ 102. (B) Exactly $ 102. (C) Less than $ 102.
- Imagine that the interest rate on the savings account was 1% per year and inflation was 2% per year. After one year, how much could you buy with the money in this account? (A) more than today. (B) Exactly the same. (C) less than today.
- Please tell me if this statement is true or false: Buying shares in one company tends to provide a safer return than a master mutual fund.
If you’ve been teaching about personal finance, the answers were probably easy for you. (Supervisor at the link below to see if you were right.) But the majority of Americans surveyed (55.7%) with college degrees did not get them all right. It turns out that those are most likely to do well on the quiz people who are rich.
Just another request to teach your kids about money and continue learning on your own.