Saturday, June 02, 2018
Correct answers not provided
ZH cites a very simple Bloomberg survey on retirement literacy. It's three questions with simple multiple choice answers. The answers are not numerical, just "more than" or "less than". Normally this would be a good approach to get a sense of overall literacy, without forcing people to know the arithmetical details of bank fraud and stock fraud.
Problem: The available answers don't make sense.
1. Suppose you had $100 in a savings account and the interest rate was 2 percent per year. How much would you have after 5 years? Answers: more than before, less than before, same as before.
2. Imagine that the interest rate on your savings account is 1 percent and inflation is 2 percent. Same choices as previous question.
3. Buying a single company stock is usually safer than buying a mutual fund. True or False?
On questions 1 and 2, the ONLY CORRECT ANSWER is "What is this thing called interest? You seem to know what it is, so I have to presume it's a real thing for your Tribe. Whatever it might be, it's not available to my tribe."
On question 3, the ONLY CORRECT ANSWER is "Both choices are deadly. If I wanted to throw my money away, I'd just flush it. I wouldn't divert it through your Tribe so that your Tribe can securitize and profit from it."
¶ 3:05 AM 
