QUESTION: 941

Mileage tests were conducted on a randomly selected sample of 100 newly developed automobile tires. The average tread wear was found to be 50,000 miles with a standard deviation of 3,500 miles. What is the best estimate of the average tread life in miles for the entire population of these tires?

None of these answers
(3,500/100)
3,500
50,000
(50,000/100)

Answer(s): D

Explanation:

The sample mean is a good estimate of the population mean.

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QUESTION: 942

You have a portfolio of two assets, X and Y. X has an expected return of 15% with a variance of 900%%, and Y has an expected return of 9% with a variance of 400%%. Assume the covariance between X and Y is 225%%. For a portfolio composed of 50% X and 50% Y, find the expected return and variance.

10%, 437.5%%.
12%, 437.5%%.
12%, 367.5%%.
14%, 512.5%%.

Answer(s): B

Explanation:

The expected return is 0.5*15% + 0.5*9% = 7.5% + 4.5% = 12%. The variance will be trickier. The variance will be equal to (w_X)^2 * (sigma_X)^2 + (w_Y)^2 * (sigma_Y)^2 + 2 * w_X * w_Y * cov(X,Y) = (0.5)^2 * 900%% + (0.5)^2 * 400%% + 2 * (0.5) * (0.5) * 225%% = 437.5%%.

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QUESTION: 943

How much must you deposit today if you wish to have $20,000 in 10 years, assuming that interest accumulates at 9% per year, compounded annually?

$2,000.00
$9,104.36
$8,448.22
$7,236.99
$7,103.49

Answer(s): C

Explanation:

On the BAII Plus, press 10 N, 9 I/Y, 0 PMT, 20000 FV, CPT PV. On the HP12C, press 10 n, 9 i, 0 PMT, 20000 FV, PV. Note that the answer is displayed as a negative number. Make sure that the BAII Plus has the P/Y value set to 1.

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QUESTION: 944

What is another name for the alternate hypothesis?

None of these answers
Rejected hypothesis
Research hypothesis
Null hypothesis

Answer(s): C

Explanation:

The alternate is also referred to as the research hypothesis.

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QUESTION: 944

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