Examlex

Solved

You Have Been Offered Two Jobs in Two Different Cities

question 9

Essay

You have been offered two jobs in two different cities.The jobs are very similar in description.The first job offer is in Denver, Colorado at an annual salary of $52,000.The second job offer is for a job in Chicago, Illinois at an annual salary of $60,000.The cost of living index for Denver is 115 and 135 for Chicago.Which position will provide you the greater purchasing power?


Definitions:

Risk-Free Asset

An investment with a guaranteed return and no risk of financial loss, typically represented by government bonds.

Capital Allocation Line

A line that graphically represents the risk-versus-return profile of risky assets, and indicates the optimal portfolio of risky and risk-free assets.

Risk-Free Asset

An investment with a guaranteed return and no risk of financial loss, often represented by government bonds.

Risky Asset

An asset with an uncertain rate of return.

Related Questions