Table 1 Overview of levels of financial knowledge, characteristics of difficulty and levels of knowledge
From: Assessing the financial knowledge of university students in Germany
Levels of FK | Characteristics of difficulty in differentiating the levels |
|---|---|
1) Understanding basic financial concepts in a company | Time periods to be considered: past |
Uncertainty to be considered: no | |
Degree of abstraction: low | |
Calculation: no or simple additive calculation | |
2) Analyzing (static) concepts and (static) investment appraisal methods | Time periods to be considered: mainly past |
Uncertainty to be considered: usually no | |
Degree of abstraction: medium | |
Calculation: combination of different basic arithmetic operations | |
3) Applying and analyzing dynamic investment appraisal methods | Time periods to be considered: several periods of time, usually past and future |
Uncertainty to be considered: usually yes | |
Degree of abstraction: high | |
Calculation: calculations based on formulae | |
4) Creating finance plans | Time periods to be considered: several periods of time, past and future |
Uncertainty to be considered: yes | |
Degree of abstraction: very high | |
Calculation: calculations based on formulae |