The Department of Corrections (DOC)

The Department of Corrections (DOC) has identified the lack of education credentials as a key factor in reoffending. In other words, inmates with a high school diploma are less likely to reoffend upon release as compared to inmates without a high school diploma. On the average, 80 percent of the inmates without a high-school degree reoffend as compared to 40 percent of inmates with a degree.

Programmers at DOC have identified two model programs:

The first program is called Education First; the outcome of the program is passing the high-school equivalency examination. This program has undergone extensive outcome evaluations, and the success rate is figured to be 50 percent, which means that 50 percent of the inmates are successful in passing the high-school equivalency examination.
The second program is General Education Development Preparatory program (GED Prep). The outcome of this program is also passing the high-school equivalency examination. The success rate of this program is identified as 80 percent, which means that 80 percent of the inmates that take this program are successful in passing the high-school equivalency examination.
The first program, Education First, costs $500 per pupil, and the second program, GED Prep, costs $5000 per pupil. Currently, the cost of incarceration is $32,000 per year.

Since the DOC has experienced decreasing budgets over the past 20 years, cost of programs is a very real concern.

Which of the two—Education First or the GED Prep program should be adopted? Why? Analyze the scenario and the programs and provide a logical justification for your answer considering:

The quality of the programs
The goal(s) and objective(s) of the programs
The policies’ design
The success rate of the programs
The cost considerations

Sample Solution

ndex that can be used to assess the investment performance.The IPS should be reviewed and updated regularly-whenever there is a major change in clients objective constraints or circumstance occurs.Understanding the clients needs further includes their specification with respect to taxation ,liquidity, legal aspects etc.

Step 2: The Execution step-This step involves constructing a suitable portfolio based on the IPS. This step consists of Asset allocation,Security analysis, and Portfolio constructions.
Asset allocation involves assessing the risk and return characteristic of Available investments, Economic and Capital market expectations along with distribution between various asset classes.
Asset allocation consist of two approaches which are:
a. Top- Down Approach(This investment analysis includes examining of economic growth, monetary policy by central bank and bond prices and yields)
b. Bottom-Up Approach(This involves analysis of a particular companies Financial ratios, Earnings, Revenue, Sales Growth, Financial analysis, Cash flow, Management performance and the company’s Products and Market share.)
Security Analysis- Analysts uses their detailed knowledge about individual industry and specific companies to arrive at a investment selection decision. Analyst assess the expected level and risk of cash flows that each security will produce.
Portfolio Construction- It is based on Target asset allocation , Security analysis, Clients requirements based on the IPS. Portfolio Management should ensure the risk in the portfolio is consistent with the risk level as mentioned in the IPS. Portfolio construction phase also involves trading.

Step 3: The feedback :helps the portfolio manger rebalancing the portfolio arising out of change in market conditions or the circumstance of the client .

Types of Financial Instrument:

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