QUESTION: 621

The mean amount of gasoline and services charged by Key Refining Company credit customers is $70 per month. The distribution of amounts spent is approximately normal with a standard deviation of $10. What is the probability of selecting a credit card customer at random and finding the customer charged between $70 and $83?

0.4032
None of these answers
0.1962
0.3413
0.4750

Answer(s): A

Explanation:

z = (x-u)/sigma. z1 = 70 - 70/10 = 0 and z2 = 83 - 70/10 = 1.3. For z = 1.3, the area under the curve is 0.4032.

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QUESTION: 622

Two events, A and B, are independent if:

P(A and B) = 1
P(A and B) = P(A) + P(B)
P(A and B) = 0
P(A and B) = P(A) P(B)

Answer(s): D

Explanation:

This is the definition of independence.

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QUESTION: 623

If you deposit $4,250 today into a savings account paying 6% per year, compounded semiannually, how much is in your account in 4 years?

$5,365.53
$6,773.85
$6,000.00
$4,783.41
$5,383.77

Answer(s): E

Explanation:

On the BAII Plus, press 8 N, 6 divide 2 = I/Y, 4250 PV, 0 PMT, CPT FV. On the HP12C, press 8 n, 6 ENTER 2 divide i, 4250 PV, 0 PMT, FV. Note that the answer will be displayed as a negative number. Make sure the BAII Plus has the P/Y value set to 1.

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QUESTION: 624

A stock has the following returns over 4 years: +5%, -6%, +8%, +3%. The annual arithmetic and geometric rates of return over the 4 years are:

5%; 5.57%
2.5%; 9.79%
10%; 9.79%
2.5%; 2.36%

Answer(s): D

Explanation:

The mean equals (5% + (-6%) + 8% + 3%)/4 = 2.5%
The geometric mean equals (1.05 * 0.94 * 1.08 * 1.03)^(1/4) = 2.36% Note that the geometric mean is less than the mean.

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QUESTION: 621

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QUESTION: 622

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QUESTION: 623

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QUESTION: 624

Explanation: