QUESTION: 869

The quarterly compounded rate is 8% quoted on an annualized basis. The equivalent annually compounded rate is:

8.00%
8.24%
8.16%
7.95%

Answer(s): B

Explanation:

To solve such problems, think about investing a dollar for a year. The final amount should be the same under both the quotations. Under annually compounded rate, r, $1 grows to 1+r in 1 year. Under quarterly compounding, it grows to (1+0.08/4)^4 = 1.0824. Since these two should be equal, we get 1+r = 1.0824, giving r = 8.24%. Note that the annually compounded rate must be larger than the quarterly rate, ruling out (d) automatically.

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QUESTION: 870

The least squared regression minimizes the:

adjusted R-square.
absolute value of the distance between the observed points and the regression line.
explained variance.
the square of the distance between the observed points and the regression line.

Answer(s): D

Explanation:

The least squared regression minimizes the square of the distance between the observed points and the regression line.

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QUESTION: 871

You are faced with a counting problem in which the number of outcomes is infinite. The counting method you should use is:

The multinomial formula.
The multiplication rule.
The binomial formula.
None of these answers is correct.

Answer(s): D

Explanation:

If the number of outcomes is infinite, a counting method should not be used at all, and the question cannot be answered with counting methods. None of the above is the correct response.

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QUESTION: 872

A joint probability is expressed symbolically as:

P(A | B).
P(B | AB).
P(AB).
P(A or B).

Answer(s): C

Explanation:

A joint probability takes the form of P(AB), the probability that a an event A and an event B will both happen.

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Free CFA-Level-I Exam Braindumps (page: 218)

QUESTION: 869

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QUESTION: 870

Explanation:

QUESTION: 871

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QUESTION: 872

Explanation: