- March 18, 2019
- Posted by: instructant
- Category: Finance & accounting
The Household, Income and Labour Dynamics in Australia (HILDA) is a survey launched in 2001 by the University of Melbourne following the same group of Australians over their lives. The survey has, for the first time, reported on financial literacy. Five questions were asked about basic financial concepts such as inflation, calculating interest and portfolio diversification. The results indicated that fewer than half of all Australians could answer all five basic questions correctly. So, what were the five questions?
(Source: In the Black – Feb19)
- Suppose you put A$100 into a no-fee savings account, with a guaranteed interest rate of 2 per cent per year. You don’t make any further payments into the account and you don’t withdraw any money. How much would be in the account at the end of the financial year, once the interest payment is made?
- Imagine now that the interest rate on your savings account was 1 per cent per year and inflation was 2 per cent per year. After one year, would you be able to buy more than today, exactly the same as today, or less than today with the money in this account.
- Do you think that the following statement is true or false? “Buying shares in a single company usually provides a safer return than buying shares in a number of different companies.”
- Again, please tell me whether you think the following statement is true or false: “An investment with a high return is likely to be a high risk.”
- Suppose that by the year 2020 your income has doubled, but the prices of all the things you buy have also doubled. In 2020, will you be able to buy more than today, exactly the same as today, or less than today with your income?