QUESTION: 909

What is the annual Internal Rate of Return of this series of annual cash flows: Year 0: <$25,000>, Year 1:
$2,000, Year 2: $0, Year 3: $15,000, Year 4 to indicate a negative number).

10.04%
15.29%
11.59%
8.61%
9.13%

Answer(s): E

Explanation:

On the BAII Plus, press CF 2nd CLRWork 25000 +/- ENTER DownArrow 2000 ENTER DownArrow DownArrow 0 ENTER DownArrow DownArrow 15000 ENTER DownArrow DownArrow 0 ENTERDownArrow DownArrow 18000 ENTER DownArrow DownArrow 2nd Quit. Then press Irr CPT. On the HP12C, press these keys: 25000 CHS BlueShift CFo 2000 BlueShift CFj 0 BlueShift CFj 15000
BlueShift CFj 0 BlueShift CFj 18000 BlueShift CFj. Then press YellowShift Irr. The "DownArrow" represents the downward-pointing arrow on the top row of the BAII Plus keyboard. Make sure the BAII Plus has the P/Y value set to 1.

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QUESTION: 910

What is your monthly payment, beginning next month, on a $15,000 loan, if you pay it off over 48 months and the interest rate is 2.9% per year, compounded monthly?

$582.76
$3,772.68
$331.35
$324.51
$306.88

Answer(s): C

Explanation:

On the BAII Plus, press 48 N, 2.9 divide 12 = I/Y, 15000 PV, 0 FV, CPT PMT. On the HP12c, press 48 n, 2.9 ENTER 12 divide i, 15000 PV, 0 FV, PMT. 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.

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QUESTION: 911

Which of the following is/are true about the Central Limit Theorem?

It cannot be applied if the population distribution is non-normal.
II. It cannot be applied if the population distribution is highly skewed.
III. It implies that the mean of the population equals the mean of the means of all possible samples.
II only
I only
I & III
III only
I & II.
I, II, & III

Answer(s): D

Explanation:

The Central Limit Theorem states that for a population with mean M and variance S, a sample of large size n has a sampling distribution of mean which is approximately normal with mean M and variance S/n.

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QUESTION: 912

Which of the following is the formula for the covariance between X and Y?

(X - E(X))*(Y - E(Y)).
E[(X - E(X))*(Y - E(Y))].
E[(X + E(X))*(Y + E(Y))].
E[XY - E(XY)].

Answer(s): B

Explanation:

E[(X - E(X))*(Y - E(Y))] is the covariance between X and Y.

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QUESTION: 909

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QUESTION: 911

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QUESTION: 912

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