单选题The following two questions refer to the following passage: A prestigious private high school has made available to local families a tuition prepayment plan to ease the burden of paying the school's hefty tuition when a student matriculates. The plan allows parents of children under three years old to reserve a spot for their child at the school by making a payment of one-fourth of the current annual tuition for the high school. The parents then make an identical payment every year for the next 15 years, and the student's full four-year tuition is considered paid in full, regardless of how much the regular tuition payments have risen in the intervening years.
单选题
Under which of the following circumstances would taking part in the prepayment plan NOT be advisable for parents? A. If the tuition at the school has risen an average of 4 percent per year for the last twenty years B. If the child in question is particularly talented at math, but the high school is more known for its advanced humanities programs than its math program C. If the parents of the child in question are uncertain that they will reside in the state for more than 10 years D. If the school has an arrangement with the local university whereby students can take courses at the University if they have surpassed the level of courses offered at the high school E. If the school offers athletic scholarships to a small number of talented athletes
【正确答案】
C
【答案解析】If the parents are uncertain that they will be in the state in 10 years, then it does not make sense for them to prepay tuition for a high school that the child may not be able to attend. Answer A says nothing about the future rate of tuition increases, and does not provide other relevant financial information, such as the rate of inflation and the rate of return that the parents could get if the same amount of money were invested elsewhere. Answer B is a reason for the child to perhaps choose another school, although the mathematics program might still be better than all local alternatives; in any event, B does not relate to the advisability of taking part in the prepayment plan. Answer E is incorrect because it would be inadvisable for parents to make financial decisions based on the assumption that their child would win an athletic scholarship.
单选题
Under which of the following circumstances would it be advisable for parents to take part in the prepayment plan? A. If the school assures parents that participation in the prepayment plan will be taken into consideration when the school admissions council makes decisions about which first-year students to admit to the school B. If the parents are certain that their child will attend this high school, and if the rate of tuition increase would surpass the rate of return that the parents could earn if they invested the same 16 payments in interest-bearing investments of their own choosing C. If the children of other parents who have taken part in the prepayment plan have been successful at the high school and gone on to enroll at Ivy League universities D. If the parents feel that this high school will provide the best educational, athletic, and social experience that their child could receive E. If the school can guarantee that its level of prestige at the time of the student's matriculation will be as great as or greater than its current level
【正确答案】
B
【答案解析】First of all, a prepayment plan of this nature makes sense only if the parents are certain that their child will actually attend the high school, or if there is some other benefit to be gained by taking part (answer A provides such a benefit, but the benefit described is less than the "certainty" mentioned in answer B; C also describes a benefit, but it is unclear that this benefit derives specifically from participation in the prepayment program). Second, if the rate of tuition increases would not surpass the level of returns that the parents could obtain on their own through private investments, the parents would be better off investing those payments themselves and then paying the tuition out of their investments and investment gains.