Free CFA-Level-I Exam Braindumps (page: 119)

Page 119 of 991

The standard normal probability distribution is one which has:

  1. a mean of 0 and any standard deviation
  2. a mean of 0 and a standard deviation of 1
  3. any mean and a standard deviation of 1
  4. a mean of 1 and any standard deviation
  5. none of these answers are correct

Answer(s): B

Explanation:

The standard normal probability distribution has a mean of 0 and std. deviation of 1.



A statistician has framed his hypothesis testing problem as:
Ho: mean = 100 H1: mean < 100
Specify the region for the p-statistic which will lead to the rejection of the null at the 80% significance level.

  1. z-statistic < -0.84
  2. z-statistic > +1.19
  3. z-statistic < -1.35 or z-statistic > +1.35
  4. z-statistic < -1.645

Answer(s): A

Explanation:

Since the alternative is directional and to the left, we use a left-tailed test. For this, the critical value at 80% level is -0.84. -0.84 is the value above which 80% of the probability mass of the standard normal distribution lies).
The rejection region is then given by z-statistic < -0.84.



If you deposit $400 today into an account paying 8% per year, compounded quarterly, how much will be in the account after 42 months?

  1. $10,135.79
  2. $1,174.88
  3. $918.90
  4. $927.54
  5. $527.79

Answer(s): E

Explanation:

There are 14 quarters in 42 months (42 divide 3 =). On the BAII Plus, press 14 N, 8 divide 4 = I/Y, 400 PV, 0 PMT, CPT FV. On the HP12C, press 14 n, 8 ENTER 4 divide i, 400 PV, 0 PMT, FV. Note that the answer will be displayed as a negative number. Make sure the BAII Plus has the value of P/Y set to 1.



A market survey was conducted to estimate the proportion of homemakers who could recognize the brand name of a cleanser based on the shape and color of the container. Of the 1,400 homemakers, 420 were able to identify the brand name. Using the 0.99 degree of confidence, the population proportion lies within what interval?

  1. 0.250 and 0.350
  2. 0.268 and 0.332
  3. 0.950 and 0.997
  4. 0.100 and 0.400
  5. None of these answers

Answer(s): B

Explanation:

Interval estimate can be found from p +/- z[p(1-p)/n]^0.5. Here we have n = 1400, p = 414/1400 = 0.3 and z = 2.58 (for 99%).
Therefore 0.3 +/- 2.58*0.01225 and we get 0.268 and 0.332.



Page 119 of 991



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