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Adults from many regions of the world struggle with financial knowledge, behaviors or attitudes, according to the International Survey of Adult Financial Literacy Competencies recently released by the Organisation for Economic Co-operation and Development.
The OECD is made up of 35 nations — both advanced and developing countries — and seeks to improve economic and social well-being worldwide.
For the OECD’s latest financial literacy study, adults from 30 countries and economies across six continents were interviewed — a total of 51,650 people from ages 18 to 79. Both OECD member countries and non-member countries participated in the study, although the United States did not.
The countries that earned the highest financial literacy scores are:
- France (14.9 out of 21)
- Finland (14.8)
- Norway (14.6)
- Canada (14.6)
- Hong Kong (14.4)
The average financial literacy score was 13.2.
Financial literacy scores were determined by combining participants’ scores for financial knowledge, behavior and attitude.
Looking at financial knowledge alone, only 56 percent of adults achieved the minimum target score of at least 5 out of 7. For behaviors and attitudes, only 51 percent and 50 percent, respectively, achieved the minimum target scores.
The OECD concludes:
The overall low level of financial literacy stresses the importance of starting financial education early and, ideally, in schools. Moreover, public authorities need to improve financial resilience and long-term planning, support smart choice of financial products, and more generally strengthen knowledge, skills and behaviours of adults.
If you’re wondering how your financial knowledge stacks up, here are a few questions from that section of the study:
- You lend $25 to a friend one evening, and he gives you $25 back the next day. How much interest has he paid on this loan?
- Suppose you put $100 into a no-fee, tax-free savings account with a guaranteed interest rate of 2 percent per year. You don’t make any further payments into this account, and you don’t withdraw any money. How much would be in the account at the end of the first year, once the interest payment is made?
- True or false: An investment with a high return is likely to be high risk.
- True or false: High inflation means that the cost of living is increasing rapidly.
- True or false: It is usually possible to reduce the risk of investing in the stock market by buying a wide range of stocks and shares.
The answers to those questions are none, $102 and true for all three true-or-false questions.
How did you do on the money pop quiz? Let us know below or on Facebook.