Private Colleges and Universities Rely on Money Contributed by Individuals

question 111

Multiple Choice

Private colleges and universities rely on money contributed by individuals and corporations for their operating expenses. Much of this money is invested in a fund called an endowment, and the college spends only the interest earned by the fund. A recent survey of eight private colleges in the United States revealed the following endowments (in millions of dollars) : 77.8, 45.1, 243.4, 489.5, 113.9, 187.6, 102.4, and 210.2. What value will be used as the point estimate for the mean endowment of all private colleges in the United States?

• A) 183.738
• B) 8
• C) 209.986
• D) 1469.9

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Definitions:

Net Capital Outflow

The difference between a country's purchase of foreign assets and the sale of domestic assets to foreigners in a given time period.

Real Exchange Rate

The nominal exchange rate adjusted for differences in price levels between two countries, showing how many units of a foreign product can be purchased with one unit of a domestic product.

Foreign Direct Investment

An investment made by a company or individual in one country in business interests in another country, in the form of either establishing business operations or acquiring business assets.

Net Capital Outflows

The difference between the purchase of foreign assets by domestic residents and the purchase of domestic assets by foreigners, indicating the flow of capital from a country.