I think that ATAR is a good indication of intelligence for the most part. From my experience (could just be my school?) But all the guys who got 90 or 95+ were definitely more intelligent than the guys who got 80-90 or lower, and generally had more common sense. People tend to judge people on their "retardedness" before they even know them, so it's not really fair to call that girl a retard because she didn't know what equity was. There could have been many things she knew that you didn't.
And I guess it also depends what university you go to, for example, University of Melbourne has an average ATAR of about 94, and everybody I've met there seems to be very smart, while there are other universities where the average ATAR is <65 and the students motivation/knowledge is questionable.
Just my opinion.