Pop quiz, hot shot: Can you answer these three questions that stump most people with university degrees?
Photo by peasap.
The quiz was developed by two business school professors, Olivia Mitchell of Wharton and Annamaria Lusardi of George Washington School. They conducted a survey to learn more about wealth inequality using this quiz, designed to test fundamental knowledge of money.
Here are the questions, as shared on Money:
- 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.
- 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.
- 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.
If you've been taught about personal finance, the answers probably came easy to you. (Head to the link below to see if you were right.) But the majority of people surveyed (55.7 per cent) with university degrees didn't get them all right. Turns out that those most likely to do well on the quiz are people who are affluent.
Just another prompt to teach your kids about money and keep on learning yourself.