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Question

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The continually increasing cost of attending college has motivated many economists to analyze the return on investment of a college education. Many people are asking if going to college is really worth it based on a rigorous analysis of the long-term financial benefits.

This Excel file College Return on Investment shows the 30 year net return on investment (2012 dollars) for 433 US public colleges and universities for in-state students in the column "30 YEAR NET ROI" (data from the Georgetown University Center on Education and the Workforce). The 30 year net return on investment is determined by calculating the earnings differential less the cost of a college education for a graduate of 2012. The earnings differential is the difference between the 30 year median pay for a 2012 bachelor's graduate and the 34-36 year median pay for a high school graduate with no post-secondary education (34-36 years are used to account for the opportunity cost of going to college).

Question 1. Calculate the z-score for NC State's 30 YEAR NET ROI. Round your answer to 2 decimal places.

Question 2. Calculate the z-score for UNC-Chapel Hill's 30 YEAR NET ROI. Round your answer to 2 decimal places.

Question 3. The z-score for Georgia Tech's 30 YEAR NET ROI is 3.37. Select the choice below that gives the correct interpretation of Georgia Tech's z-score (2 submissions allowed).

It takes 3.37 fewer years for a Georgia Tech graduate to earn the same amount of money as a graduate of any other school.Georgia Tech's 30 year net return on investment is 3.37 times as large as the mean 30 year net return on investment.    Georgia Tech's 30 year net return on investment is $337,000 above the mean 30 year net return on investment.Georgia Tech's 30 year net return on investment is 3.37 standard deviations above the mean 30 year net return on investment.Georgia Tech's 30 year net return on investment is 3.37 units above the mean 30 year net return on investment.

Explanation / Answer

Question 1. Calculate the z-score for NC State's 30 YEAR NET ROI. Round your answer to 2 decimal places.

z-score is 1.27

Question 2. Calculate the z-score for UNC-Chapel Hill's 30 YEAR NET ROI. Round your answer to 2 decimal places.

z-score is 0.57

Q3

Georgia Tech's 30 year net return on investment is $337,000 above the mean 30 year net return on investment

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