Author Question: In 1958 the average tuition for one year at an Ivy League school was 1,800. Thirty years later, in ... (Read 124 times)

fox · **on:** Jul 10, 2018

In 1958 the average tuition for one year at an Ivy League school was 1,800. Thirty years later, in 1988, the average cost was 13,700. What was the growth rate in tuition over the 30-year period?

A) 12
B) 9
C) 6
D) 7
E) 8

Question 2

A corporate investment manager needs to invest 1,000,000 for the next 6 months. The current
nominal rate of interest in the United States is 5, while the nominal rate of interest in Argentina is
8.

Which of the following statements is MOST correct?
A) The manager should invest the funds in Argentina and make an extra 30,000 for the year.
B) The manager is indifferent between investing the funds in the United States or Argentina
because real returns will always be the same in the end.
C) The manager cannot invest in Argentina because his company is investing dollars.
D) The manager may decide to invest the funds in the United States due to the international
Fisher effect, which suggests inflation in Argentina may make the extra interest income worth
less in one year.