Financial Literacy: What Are Business Schools Teaching?

The financial illiteracy of Americans has attracted the attention and funds of more than 10 federal agencies and countless other state agencies and non-profit organizations. The manifestations of poor financial skills and planning are divorce, depression, and many elderly Americans living in poverty. Hundreds of business and non-business college students have been surveyed. Both groups were found to be financially illiterate. We examined the curricula of 100 AACSB institutions and concluded that business schools are either not offering fundamental courses in personal financial planning or that the courses are not generally available to business students (for credit) or non-business students. It is ironic that college students are graduating with the required 60 credits in the liberal arts, but are not required to pass a course in personal finance. We feel strongly that it is time for business faculty, specifically finance faculty, to argue that being financially literate is as important as being literate in English and the sciences

Mutual Fund Management and Fund Performance

This study examines management characteristics, including education and experience, as determinants of mutual fund performance.  Managers with graduate degrees did not perform differently from managers without graduate degrees.  However, graduates of top 20 MBA programs outperformed MBAs from business schools not on the top 50 Wall Street Journal list.  Manager’s tenure was positively related to performance

Influence of maternal work patterns and socioeconomic status on gen y lifestyle choice

This article examines the lifestyle balance between career and family desired by the next generation of workers and whether these desires have been influenced by socioeconomic variables and maternal work patterns. The individuals who will enter the workforce in the next several years are the first generation in which most mothers worked outside the home. This article updates earlier research on career decisions to include lifestyle options such as work and family balance and decisions by males as well as females. Results from 574 participants indicate that maternal work patterns are significantly related to lifestyle choices for women and spousal lifestyle choices for men. Implications of these findings for potential employers of this generation of workers are discussed. © 2005 Curators of the University of Missouri

Financial (IL) Literacy of College Students

This study surveys 574 full-time undergraduate college students to evaluate financial literacy. We also examined personal and familial characteristics, and future family and career expectations as predictors of financial literacy. The overall mean percentage of correct answers is 46%. Students with a cumulative grade point average above a 2.0, business majors, males, and upper-class students outperformed their counterparts. Participants whose family income is high, have at least one charge card, and are Caucasian achieved higher scores. The results indicate that college students are financially illiterate. The manifestations of the costs of financial illiteracy are apparent from studying several social phenomena. For the most recent quarter ending March 2002, personal bankruptcy filings hit a new annual high of more than 1.5 million (ABI, 2002). Financial problems are one of the leading causes for divorce in the U.S. (AAML, 2002; Stanley & Markman, 1997) and one of the major reasons for the elderly living in poverty (Mason, 2000). The trend from defined benefit plans to defined contribution plans has resulted in America becoming a nation of investment managers. At the end of the year 2000, over 42 million Americans were managing deferred compensation plan accounts worth $1.8 trillion (Crawford, 2002). Yet, in 1998 over one-half of Americans reported they have not saved enough for retirement, and 53$tart, 1997, 2000, 2002; NEFE, 1998). The purpose of this study is to update the state of financial literacy among full-time undergraduate college students and to identify familial and personal characteristics that may impact their knowledge of personal finance. The term financial literacy is used by many authors and organizations (ASEC, 2001, Chen & Volpe, 1998; ISFS, 2000; Jump$tart, 2002; Mastio, 1999; NEFE, 1998; Ophelia, 1999; U.S. Senate Committee on Banking, 2002). We define this term as having a working knowledge in the following four areas - investment management, retirement planning, general money management, and credit management. A foundation in investment management and retirement planning includes knowledge of portfolio diversification, asset allocation, risk, and the importance of time horizons