日 本 ・ ・ ・ diversified investment ( true / false question ) : " buying a single company's stock usually provides a safer return than a stock mutual fund ( a financial product for investing in stocks of several companies ) " ・ ・ ・ ・ ・ ・ % source : oecd ( 2016 ), oecd / infe international survey of adult financial literacy competencies. chart 4 high scores vs financial trouble percentage of correct answers and proportion of respondents who had experienced financial trouble cases those who experienced financial trouble ( % ), nationwide average : 6. 7 ( reference ) damage caused by special fraud 20, 000 18, 000 amount of damage caused by special fraud ( right scale ) 100 mil. yen 16, 000 14, 000 12, 000 10, 000 8, 000 6, 000 4, 000 number of recorded cases of special fraud ( left scale ) 2, 000 correct answers ( % ), nationwide average : 56. 6 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 source : national police agency, cases of special fraud reported and arrested, 2018 ( final figures ). chart 5 investment stance risk - taking stance money investment suppose that, if you invested 100, 000 yen, you would get either of the following at a 50 % probability : - a capital gain of 20, 000 yen, or - a capital loss of 10, 000 yen. what would you do? have you ever invested an amount of money that exceeded your monthly living expenses? when you invested such an amount in a financial product most recently, did you compare it with other financial institutions'products or other types of financial products in order to choose one that was considered to be the most beneficial? % % i would invest, 22. 7 ( 21. 4 ) i would not invest, 77. 3 ( 78. 6 ) i invested such an amount of money after making comparisons, 17. 1 ( 15. 6 ) i have not invested such an amount of money, 74. 5 ( 75. 2 ) note : figures in parentheses represent the results of the 2016 survey. i invested such an amount of money without making any comparison, 8. 4 ( 9. 2 ) chart 6 investment stance ( survey on household finances ) to what extent do you intend to hold financial products that have a risk of falling below par, but are expected to be profitable, over the next one or two years? two - or - more - person households 2010 1. 7 2010 年 13. 6 2011 1. 3 2011 年

literacy survey with the results of a survey compiled by the international network on financial education ( infe ) of the organisation for economic co - operation and development ( oecd ), japan ranked low, at 22nd out of 30 ( chart 3 ). as the results could be affected by such factors as how the surveys were conducted and the nuance of the questions, some leeway should be allowed. nonetheless, financial literacy in japan still has much room for improvement, particularly in comparison with other countries and economies. looking at the results in more detail to find why japan ranks so low, the percentage of correct answers was notably low for questions on three subjects : inflation, compound interest, and diversified investment. i will explain each of these specifically. first, as for inflation, the true / false question was on the statement, " high inflation means that the overall cost of living is increasing rapidly. " the correct answer is of course " true. " the percentage of respondents who gave the correct answer in japan was 62 percent, which was far below that in other countries and economies, such as 97 percent in hong kong ( china ) and 92 percent in canada. nevertheless, japan's percentage soared for older age groups, and nearly 80 percent of the respondents aged 60 or older answered correctly. i assume that this age group remembers experiencing high inflation at times such as oil crises in the past, and this led to a higher number of them giving the correct answer. next, regarding compound interest, the question asked how much would be in a savings account after five years if 1 million yen is put into the account with a guaranteed interest rate of 2 percent per year, and no further deposits or withdrawals are made, and tax deductions are disregarded. the five options were : " more than 1. 1 million yen " ; " exactly 1. 1 million yen " ; " less than 1. 1 million yen " ; " impossible to tell from the information given " ; and " don't know. " the correct answer is " more than 1. 1 million yen, " due to compound interest. less than half of respondents in japan chose the correct answer - - 44 percent to be precise, whereas 75 percent in the united states and 65 percent in norway answered correctly. speaking of compound interest, albert einstein is said to have stated that compound interest is man's greatest invention. 2 what he actually intended by this remark is not known, but some say that, having witnessed the rapid growth of