After Earning Your BA, You Have to Decide Whether to Take

question 83

Multiple Choice

After earning your BA, you have to decide whether to take a job that will pay you $45,000 per year or spend an additional two years earning an MBA. If you decide to pursue the graduate degree, your annual expenses for tuition, books, board, and lodging will be $32,000. You have been offered a scholarship for $10,000 per year, but to pay the remaining $22,000 per year, you would have to cash in savings bonds from your grandparents that have been earning $500 in interest per year. The annual opportunity cost of earning your MBA is:

• A) $67,500.
• B) $77,000.
• C) $99,000.
• D) $77,500.

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Definitions:

Probability of Success

The likelihood or chance of an event happening that is considered a favorable outcome.

Normal Curve

A symmetric bell-shaped curve that represents the distribution of many types of data; most values remain near the mean and the frequencies decrease further from the mean.

Binomial Probability

The probability of obtaining a fixed number of successes in a set number of trials in an experiment with two possible outcomes.

Continuity Correction

A correction used in approximating a discrete distribution with a continuous one, especially in hypothesis testing with binomial distributions.