I examine financial literacy — specifically knowledge of risk — using data from surveys in the United States and other … countries. I show that risk literacy is very low; the majority of individuals lack knowledge of concepts such as risk … diversification and do not understand the relationship between risk and return. Findings are strikingly similar across countries; a …

+). Specifically, many in this group lack a basic grasp of asset pricing, risk diversification, portfolio choice, and investment fees …