One portion of the study presented 100 subjects — all of whom had been asked to rate their knowledge of personal finances — with 15 specific finance terms. They were then asked to rate their understanding of each term, not knowing that three of them (pre-rated stocks, fixed-rate deduction, annualized credit) were totally made up.
“The more people believed they knew about finances in general, the more likely they were to overclaim knowledge of the fictitious financial terms,” lead study author Stav Atir of Cornell said in a statement. “The same pattern emerged for other domains, including biology, literature, philosophy and geography.”