Table 1. Financial literacy questions...

Table 1.

Financial literacy questions

	Item no.	Questions	Options
Financial literacy	FL1	Suppose you have some money. Is it safer to put your money into one business or investment, or to put your money into multiple businesses or investments?	a. One business or investment b. Multiple businesses or investments c. Don’t know d. Refused to answer
	FL2	Suppose over the next 10 years the prices of the things you buy double. If your income also doubles, will you be able to buy less than you can buy today, the same as you can buy today, or more than you can buy today?	a. Less b. The same c. More d. Don’t know e. Refused to answer
	FL3	Suppose you need to borrow $100. Which is the lower amount to pay back: $105 or $100 plus 3%?	a. 105€ b. 100€ plus 3% c. Don’t know d. Refused to answer
	FL4	Suppose you put money in the bank for 2 years and the bank agrees to add 15% per year to your account. Will the bank add more money to your account the second year than it did the first year, or will it add the same amount of money both years?	a. More b. The same c. Don’t know d. Refused to answer
	FL5	Suppose you had $100 in a savings account and the bank adds 10% per year to the account. How much money would you have in the account after 5 years if you did not remove any money from the account?	a. More than 150€ b. Exactly 150€ c. Less than 150€ d. Refused to answer e. Don’t know

	Item no.	Questions	Options
Financial literacy	FL1	Suppose you have some money. Is it safer to put your money into one business or investment, or to put your money into multiple businesses or investments?	a. One business or investmentb. Multiple businesses or investmentsc. Don’t know d. Refused to answer
	FL2	Suppose over the next 10 years the prices of the things you buy double. If your income also doubles, will you be able to buy less than you can buy today, the same as you can buy today, or more than you can buy today?	a. Lessb. The samec. Mored. Don’t knowe. Refused to answer
	FL3	Suppose you need to borrow $100. Which is the lower amount to pay back: $105 or $100 plus 3%?	a. 105€b. 100€ plus 3%c. Don’t know d. Refused to answer
	FL4	Suppose you put money in the bank for 2 years and the bank agrees to add 15% per year to your account. Will the bank add more money to your account the second year than it did the first year, or will it add the same amount of money both years?	a. Moreb. The samec. Don’t knowd. Refused to answer
	FL5	Suppose you had $100 in a savings account and the bank adds 10% per year to the account. How much money would you have in the account after 5 years if you did not remove any money from the account?	a. More than 150€b. Exactly 150€c. Less than 150€d. Refused to answere. Don’t know

Notes:

Italics indicate the correct answer. Every question offers a situation involving financial decision-making, then multiple-choice answers. Key aspects covered are investment diversification (FL1); inflation and buying power (FL2); loan interest rates (FL3); compound interest (FL4) and savings growth over time (FL5)

Source: Klapper and Lusardi (2020)

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