Math2UU3*TEST4. Duration of Test: 60 minutes McMaster University, 27 November Last name (PLEASE PRINT): First name (PLEASE PRINT): Student No.

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1 Math2UU3*TEST4 Day Class Duration of Test: 60 minutes McMaster University, 27 November 208 Dr M. Lovrić Last name (PLEASE PRINT): First name (PLEASE PRINT): This test has 8 pages. Calculators allowed: Casio fx99ms or fx99ms PLUS, or similar (i.e., two lines of display and no graphing capabilities). If some piece of information is missing, you must decide on its value. The last page contains CPI values, and some formulas that you might need.. Circle ONE answer, or fill in the blank. No justification is needed. (a)[2] Which one of these quantities has a positive correlation with the total interest paid on a mortgage? Total interest is the sum of all interest payments throughout the life of a mortgage. (A) Amount of down payment (B) Payment frequency (number of payments per year) (C) Amortization period (D) Amount of a yearly prepayment (also called lump sum) (b)[2] The annual percentage rate (APR) for cash advances related to certain financial products from TD Bank is 22.99%. The corresponding effective annual rate (EAR, in %) when interest is compounded monthly, is Round off to two decimal places, so that you answer has the same format as the given APR.

2 MATH 2UU3 * Test 4 * 27 November 208 Questions (c)-(e) on this page refer to the diagram representing the Lorenz curve for a population of some country (c)[2] What quantity is represented on the vertical axis? (A) Total population of the country (B) Cumulative percent of the population, arranged from the poorest to the wealthiest (C) Cumulative percent of the total wealth (income) of the country (D) The Gini index (coefficient) for the given country (d)[2] Given the Lorenz curve for some population, the Gini coefficient (the Gini index) is computed by multiplying by. (e)[2] Which statement is correct for the wealth distribution in the diagram above? (A) The wealth is nearly evenly distributed among the entire population (B) 50 percent of the poorest people own more than 20 percent of total wealth (C) 20 percent of the wealthiest people own 60 percent of the total wealth (D) 60 percent of the poorest people own 40 percent of total wealth 2

3 MATH 2UU3 * Test 4 * 27 November 208 Questions (f) and (g) on this page refer to the following distribution (f)[2] The mean of the distribution (exact value, do not round off) is. (g)[2] The median of the distribution is. (h)[2] According to the World Bank data, at the start of 208, the GDP per capita in Canada was $44,07, and $3,52.40 in Argentina. One kilogram of bananas costs $0.70 in Canada and $0.50 in Argentina. The GDP per capita in Argentina, adjusted by purchasing power parity based on the price of bananas, is (round off to the nearest cent) $ 3

4 MATH 2UU3 * Test 4 * 27 November 208 Questions (i) and (j) on this page refer to the following data set: 0,, 4, 5, 5, 6, 22, 23, 23, 23, 24, 28, 37, 38 (i)[2] The interquartile range of this data set is. (j)[2] How many outliers are there in this data set? (A) None (B) (C) 2 (D) 3 (E) 4 (F) More than 4 (k)[2] The mean of two positive numbers A and B is 5. Then the mean of 2A and B is (A) 30 (B) 5 (C) 5 + A (D) 5 + A/2 (E) 30 A/2 (F) None of the above 4

5 MATH 2UU3 * Test 4 * 27 November (a)[2] In 206, you bought a laptop for $850. How much would you have paid for the same laptop in 203? Round off to the nearest cent. (b)[2] (Stats Canada data) In 979, the minimum wage in Ontario was $3.00. Presently, in 208, it is $4.00. Is the minimum wage today, adjusted for inflation, higher or lower than it was in 979? Support your answer with a calculation. 3. [2] The life expectancy at birth in Sierra Leone (in 205) was 50 years. Assume that, through various health-related programs, the life expectancy at birth increases by 0%. How will that increase affect the life expectancy index LEI for Sierra Leone? Answer in terms of the relative change, expressed as a percent. Round off to one decimal place. 5

MATH 2UU3 * Test 4 * 27 November 208 4. The following table shows your daily balance for May 208 on a CIBC credit card whose APR (annual percentage rate) is 9.9%.

6 MATH 2UU3 * Test 4 * 27 November The following table shows your daily balance for May 208 on a CIBC credit card whose APR (annual percentage rate) is 9.9%. Assume that you made no transactions other than the ones shown in the table (thus, there is no change in balance except on the dates shown). (a)[2] Find the average daily balance for May (note that May has 3 days). Round off to the nearest cent. (b)[2] Compute the interest that CIBC will charge you on June. Recall that credit cards apply the daily interest rate. Round off to the nearest cent. 6

7 MATH 2UU3 * Test 4 * 27 November (a)[4] Sketch the Lorenz curve for a population of an imaginary country which has 5 residents, with respective incomes of 50, 40, 20, 20, and 70 (in local currency). Label the axes appropriately, and show relevant calculations (b)[2] What can you conclude about the Gini index for this country? (A) Smaller than 0.0 (B) Not equal to, but very close to it (C) Between 0.2 and 0.5 (D) Larger than 0.5 (c)[2] Justify your choice in (b) with a correct argument. 7

8 MATH 2UU3 * Test 4 * 27 November 208 Tables and formulas Consumer price index (CPI) from Statistics Canada. Monthly interest on a credit card = average daily balance times the daily interest rate times the number of days in the given month. The Gini index (or the Gini coefficient) is defined by G = sum of absolute values of all differences in income among n people 2 n (sum of incomes of all n people) The education index EI is defined as the mean of the following two numbers: (i) themean of the actual number years of schooling (completed by anyone over 25) divided by 5, and (ii) the expected number of years of schooling divided by 8. The life expectancy index LEI is computed from LEI = The income index II is defined by II = life expectancy at birth log (GNI per capita) log(00) log(75, 000) log(00) The human development index HDI calculated from HDI = 3 LEI EI II. 8 THE END

Math2UU3*TEST2. Duration of Test: 60 minutes McMaster University, 16 October Last name (PLEASE PRINT): First name (PLEASE PRINT): Student No.

Math2UU3*TEST2. Duration of Test: 60 minutes McMaster University, 16 October Last name (PLEASE PRINT): First name (PLEASE PRINT): Student No. Math2UU3*TEST2 Day Class Duration of Test: 60 minutes McMaster University, 16 October 2018 Dr M. Lovrić Last name (PLEASE PRINT): First name (PLEASE PRINT): This test has 8 pages. Calculators allowed: