In: Finance

1. You should invest in a professional degree if:

a. Your post-degree income is greater than your income before
earning the degree

b. The present value of the incremental benefits is greater
than the present value of the incremental costs

c. The degree increases the present value of your human
capital

d. You can get into an Ivy League School

2. The price a well-informed investor would pay for an asset
in a free and competitive market is called the:

a. Market value

b. Asset value

c. Inherent value

d. Fundamental value

3. True/False. The price of a fixed-income security is
uncertain up until the time it matures.

4. You are currently 43 years old and expect to retire in 25
years, and then you expect to live for another 20 years after
retirement. Your current labor income is about $60,000. Assuming
you have no savings, how much do you need to save from this point
until retirement in order to replace 75% of your current income
during retirement? (Assume no increase in wage and that your rate
of interest will exceed inflation by 3%)

5. Cindy, who will graduate from college in a year is deciding
whether to go on for her master’s degree which will last two years.
She figures that if she takes a job immediately, she can earn
$40,000 per year in real terms for the remainder of her working
years. If she goes on for two more years of graduate study,
however, she can increase her earnings to $50,000 per year. The
cost of tuition is $40,000 per year in real terms. Is this a
worthwhile investment if the real interest rate is 5% per
year?—(Assume she will retire after working for 40 years. please
show work

1. ANSWER TO THE QUESTION IS OPTION B. THERE IS A CONCEPT KNOWN
AS **NET PRESENT VALUE(NPV)** WHEREIN YOU INVEST IN A
PROJECT IF THE PRESENT VALUE OF ITS FUTURE CASH INFLOW IS GREATER
THAN THE PRESENT VALUE OF CASH OUTFLOW. THE SAME CONCEPT APPLIES
HERE. NET PRESENT VALUE IS A CAPITAL BUDGETING METHOD WHICH HELPS
YOU TO ELIMINATE UNPROFITABLE PROJECTS AND SELECT THE PROFITABLE
ONE.

OPTION A IS INCORRECT BECAUSE PEOPLE INVEST IN PROFESSIONAL DEGREES NOT ONLY TO INCREASE THEIR INCOME BUT ALSO TO IMBIBE A LOT OF NEW QUALITIES AND SKILLS WHICH COLLECTIVELY WILL RESULT INTO INFLOW OF FUTURE BENEFITS.

OPTION C IS INCORRECT BECAUSE PROFESSIONAL DEGREES ALONG WITH A LOT OF OTHER FACTORS HELPS TO INCREASE THE PRESENT VALUE OF HUMAN CAPITAL. DEGREES ALONE DOES NOT RESULT IN INCREASE IN THE VALUE OF HUMAN CAPITAL.

OPTION D IS NOT RATIONAL BECAUSE PEOPLE DON'T INVEST IN PROFESSIONAL DEGREES JUST TO GET INTO REPUTED SCHOOLS.

The value of a college degree is greater than it has
been in nearly half a century, a least when compared to the
prospect of not getting a degree (www.pewresearch.org, January 28,
2014). Due to this fact, more and more people are obtaining college
degrees, despite the soaring costs. The accompanying table shows
the proportions of college degrees awarded in 2010 by colleges and
universities, categorized by a graduate's race and
ethnicity.
The race and ethnicity of 500 recent graduates...

Suppose f(x) is a rational function in which the degree of the
numerator is greater than the degree of the denominator. To
integrate f(x), the first step is
a) Factor the denominator into distinct linear factors
b) Factor the numerator into distinct linear factors
c) Polynomial long division
d) Make a rationalizing substitution
e) None of the above

1. Historically, women were less likely to invest in a college
degree than men. Why was this the case? What has changed to reverse
this trend?
2. Explain the economics underlying the human capital investment
decision (specifically, the decision to go to college versus
sticking with just the high school diploma).
3. Empirical evidence shows clearly that, on average,
individuals with more years of education earn more money, other
things equal. Two different theories support this evidence: human
capital theory...

28) Tosaythatturnipsarenecessitygoodsmeansthattheincome
elasticity
a) is definitely greater than 1.
b) is negative.
c) is greater than 0 but less than 1. d) is equal to 1.
e) is equal to 0.
29) The fact that the PPF usually bows away from the origin
implies that ...
a) as the production of any good increases, there is an increase
in the opportunity cost of producing it.
b) as the production of any good increases, there is a decrease
in the opportunity...

“For bonds selling at a discount, the yield to maturity should
be greater than the current yield and the coupon rate.” Is the
statement true or false? Explain why.

When Marginal Revenue is greater than
Marginal Cost you should produce _________ output to maximize
profit. When Marginal Revenue is less than Marginal
Cost you should produce _______ output to maximize profit.

Should Texas afford greater protections to individuals than
offered by the Federal Government, or should Texas provide the same
freedoms afforded by the US Constitution. Does this
hinder or help law-enforcement procedures in Texas?

In both your professional and personal life, you will make a
variety of decisions. You should consider the financial and
nonfinancial aspects while making decisions. To evaluate scenarios,
you will also use some tools such as net present value (NPV),
internal rate of return (IRR), modified internal rate of return
(MIRR), payback, discounted payback, and return on investment (ROI)
that you have discussed so far.
In this assignment, you will evaluate the financial aspects of
making decisions.
Tasks:
Investigate any...

1)
You wish to test the claim that the first population mean is
greater than the second population mean at a significance level of
α=0.002α=0.002.
Ho:μ1=μ2Ho:μ1=μ2
Ha:μ1>μ2Ha:μ1>μ2
You obtain the following two samples of data.
Sample #1
Sample #2
37.0
29.1
40.7
52.0
75.0
56.4
72.1
60.8
67.1
50.4
32.5
65.3
32.8
70.4
21.6
25.3
57.3
22.1
4.3
39.4
42.9
50.3
What is the test statistic for this sample?
test statistic = Round to 4 decimal places.
What is the...

The number that represents the value that 95% of all expected
outcomes should be greater than is the ___________.
a. VaR(0.95)
b. volatility
c. VaR(0.05)
d. Sharpe ratio

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