At the prompting of the Wall Street Journal’s Jason Zweig through a LinkedIn update, I decided to take a risk literacy test that he discovered. I am proud of my results because I take pride in my risk management skills as a portfolio manager. In the long run, managers who manage risk the best should deliver the greatest alpha. Still, the risk manager in me is very aware that the test was not overly challenging and that I should not get too confident; there were only three moderately difficult questions. But, as they conclude, “practice makes perfect.” My results:
Congratulations on completing your statistical and risk literacy test!
Your numeracy score is better than about 75-100% of all college educated individuals. Roughly, this means that out of every 100 people who take the test, you will do better than about 90% (90 people) of all other people. This is the highest score one can receive on this test.
Technically, relative to the general population, you are among the most statistically literate in the world.
Based on your score, you are not very likely to experience the extreme difficulty most people have when faced with common types of statistical thinking…
In our uncertain and complex world you are likely to find that your higher levels of risk and statistical literacy are very beneficial and important.
Indeed, your levels of numeracy reflect a skill level that very few people ever achieve… one that is the result of considerable practice.
As the saying goes: ” Practice makes perfect.”
And they were not even trying to sell me anything.