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CHAPTER 1 – Financial Economics End-of-Chapter Problems
Defining Finance
1. What are your main goals in life? How does finance play a part in achieving those goals? What are the major tradeoffs you face?
SAMPLE ANSWER: • Finish school • Get good paying job which I like • Get married and have children • Own my own home • Provide for family • Pay for children’s education • Retire
How Finance Plays a Role:
SAMPLE ANSWER: • Finance helps me pay for undergraduate and graduate education and helps me decide whether spending the money on graduate education will be a good investment decision or not. • Higher education should enhance my earning power and ability to obtain a job I like. • Once I am married and have children I will have additional financial responsibilities (dependents) and I will have to learn how to allocate resources among individuals in the household and learn how to set aside enough money to pay for emergencies, education, vacations etc. Finance also helps me understand how to manage risks such as for disability, life and health. • Finance helps me determine whether the home I want to buy is a good value or not. The study of finance also helps me determine the cheapest source of financing for the purchase of that home. • Finance helps me determine how much money I will have to save in order to pay for my children’s education as well as my own retirement.
Major Tradeoffs:
SAMPLE ANSWER
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发表于 2016-10-27 16:47:35
发表于 2021-4-19 20:30:39