PROGRAMME FOR INTERNATIONAL STUDENT ASSESSMENT

PISA 2012 FINANCIAL LITERACY QUESTIONS AND ANSWERS

TABLE OF CONTENTS

INTRODUCTION ....................................................................................................................................... 3 QUESTION LEVEL 1: INVOICE ............................................................................................................. 4 QUESTION LEVEL 2: INVOICE ............................................................................................................. 6 QUESTION LEVEL 3: SHARES ............................................................................................................. 8 QUESTION LEVEL 4: PAY SLIP ......................................................................................................... 10 QUESTION LEVEL 5: NEW OFFER .................................................................................................... 12 FINANCIAL LITERACY TEST LEVELS............................................................................................... 14 FINANCIAL QUESTION CATEGORIES ............................................................................................. 15 FINANCIAL CONTENT ....................................................................................................................... 15 FINANCIAL CONTEXTS .................................................................................................................... 16 FINANCIAL LITERACY PROCESSES ............................................................................................ 17

INTRODUCTION

The OECD's Programme for International Student Assessment (PISA) evaluates education systems worldwide by testing 15-year-olds in key subjects. In 2012, 18 countries and economies chose to assess financial literacy: Australia, Belgium (Flemish Community), Shanghai-China, Colombia, Croatia, Czech Republic, Estonia, France, Israel, Italy, Latvia, New Zealand, Poland, Russia, Slovak Republic, Slovenia, Spain and the United States.

The PISA financial literacy test is designed to measure whether students have the knowledge and understanding of financial concepts and risks, as well as the skills, motivation and confidence to apply such knowledge and understanding in order to make effective decisions across a range of financial contexts, to improve the financial well-being of individuals and society, and to enable participation in economic life.

This document provides examples of questions the students answered as well as information on the concepts and skills tested and what 15-year-olds students can do at the each of the 5 levels of difficulty.

PISA questions often refer to situations that take place in the fictional country of Zedland, where the Zed is the unit of currency.

QUESTION LEVEL 1: INVOICE

Sarah receives this invoice in the mail

QUESTION

Why was this invoice sent to Sarah?

A. Because Sarah needs to pay the money to Breezy Clothing. B. Because Breezy Clothing needs to pay the money to Sarah. C. Because Sarah has paid the money to Breezy Clothing. D. Because Breezy Clothing has paid the money to Sarah.

Invoice Breezy Clothing Invoice Number: 2034 Date issued: 28 February

Sarah Johanson Breezy Clothing 29 Worthill Rd 498 Marple Lane Kensington Brightwell Zedland 3122 Zedland 2090

Product code

Description

Quantity Unit cost

Total (excluding tax)

T011 T-shirt 3 20 60 zeds

J023 jeans 1 60 60 zeds

S002 scarf 1 10 10 zeds

Total Excluding Tax: 130 zeds Tax 10%: 13 zeds Postage: 10 zeds Total Including Tax: 153 zeds Already Paid: 0 zeds

Total due: 153 zeds Date due: 31 March

FINANCIAL LITERACY QUESTION (LEVEL 1) THE CORRECT ANSWER IS:

(A) – BECAUSE SARAH NEEDS TO PAY THE MONEY TO BREEZY CLOTHING

QUESTION LEVEL

At level 1 students can identify common financial products and terms and interpret information relating to basic financial concepts. They can recognise the difference between needs and wants and can make simple decisions on everyday spending. They can recognise the purpose of everyday financial documents such as an invoice and apply single and basic numerical operations (addition, subtraction or multiplication) in financial contexts that they are likely to have experienced personally.

NATURE OF THE TASK

Recognise the purpose of an invoice. Calculations are not required in this item.

The context is individual. The question belongs to the money and transactions content category because it involves awareness of the different forms and purposes of money and handling simple monetary transactions such as everyday payments.

FINANCIAL LITERACY PROCESS

The process is identify financial information because the individual has to search and access sources of financial information, and identify or recognise its relevance.

QUESTION LEVEL 2: INVOICE

QUESTION

How much has Breezy Clothing charged for delivering the clothes? Delivery charge in zeds:

......................................

Invoice Breezy Clothing Invoice Number: 2034 Date issued: 28 February

Sarah Johanson Breezy Clothing 29 Worthill Rd 498 Marple Lane Kensington Brightwell Zedland 3122 Zedland 2090

Product code

Description

Quantity Unit cost

Total (excluding tax)

T011 T-shirt 3 20 60 zeds

J023 jeans 1 60 60 zeds

S002 scarf 1 10 10 zeds

Total Excluding Tax: 130 zeds Tax 10%: 13 zeds Postage: 10 zeds Total Including Tax: 153 zeds Already Paid: 0 zeds

Total due: 153 zeds Date due: 31 March

FINANCIAL LITERACY QUESTION (LEVEL 2) THE CORRECT ANSWER IS: 10

QUESTION LEVEL

At level 2 students begin to apply their knowledge of common financial products and commonly used financial terms and concepts. They can use given information to make financial decisions in contexts that are immediately relevant to them. They can recognise the value of a simple budget and can interpret prominent features of everyday financial documents. They can apply single basic numerical operations, including division, to answer financial questions. They show an understanding of the relationships between different financial elements, such as the amount of use and the costs incurred.

NATURE OF THE TASK

Identify the cost of postage on an invoice.

FINANCIAL LITERACY PROCESS

The process is identify financial information because the individual has to search and access sources of financial information, and identify or recognise its relevance.

QUESTION LEVEL 3: SHARES

This graph shows the price of one Rich Rock share over a 12-month period.

Rich Rock Share Price

Price (zeds)

Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May

Time (months)

QUESTION

Which statements about the graph are true?

Statement Is the statement true or false?

The best month to buy the shares was September.

True / False

The share price increased by about 50% over the year.

True / False

FINANCIAL LITERACY QUESTION (LEVEL 3) THE CORRECT ANSWER IS:

ONLY THE FIRST STATEMENT IS TRUE

QUESTION LEVEL

At level 3 students can apply their understanding of commonly used financial concepts, terms and products to situations that are relevant to them. They begin to consider the consequences of financial decisions and they can make simple financial plans in familiar contexts. They can make straightforward interpretations of a range of financial documents and can apply a range of basic numerical operations, including calculating percentages. They can choose the numerical operations needed to solve routine problems in relatively common financial literacy contexts, such as budget calculations.

NATURE OF THE TASK

Analyse information in a financial context by considering the information in a line graph about an investment product. The graph shows how the price of shares has changed over a year. The first part of the question assesses a student’s understanding that shares should be bought when the price is low. The second part of the question assesses whether students can correctly identify the increase in share prices and calculate the percentage change over time.

The context is individual. The question belongs to the risk and reward content category because it involves the ability to identify ways of managing, balancing and covering risks, and an understanding of the potential for financial gains or losses across a range of financial contexts.

FINANCIAL LITERACY PROCESS

The process is analyse information in a financial context because it includes interpreting, comparing and contrasting, synthesising, and extrapolating from information that is provided, and it involves recognising something that is not explicit.

QUESTION LEVEL 4: PAY SLIP

Each month, Jane’s salary is paid into her bank account.This is Jane’s pay slip

for July.

EMPLOYEE PAY SLIP: Jane Citizen

Position: Manager 1 July to 31 July

Gross salary 2800 zeds

Deductions 300 zeds

Net salary 2500 zeds

Gross salary to date this year 19 600 zeds

QUESTION

How much money did Jane’s employer pay into her bank account on 31 July?

A 300 zeds B 2500 zeds C 2800 zeds D 19 600 zeds