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Free CFA-Level-I Exam Braindumps (page: 241)

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PDF with 3963 Questions

A random variable with a mean equal to 6.0 and a standard deviation of 1.5 has a coefficient of variation equal to ________.

  1. 0.25
  2. zero
  3. 4.0
  4. 1.5
  5. none of these answers

Answer(s): A

Explanation:

The coefficient of variation equals the ratio of the standard deviation to the mean.



A researcher has organized 310 observations into 9 classes. The frequency of the 50-75 frequency class is 34.
The relative frequency of the class equals ________.

  1. 0.14
  2. 34
  3. 0.11
  4. 0.27

Answer(s): C

Explanation:

relative frequency = class frequency/total # of observations
= 34/310 = 0.11
Remember that relative frequency is always a number between zero and one.



Variable X is distributed normally and has a mean of 10. If the probability that an observation of X will be negative is 0.16, what is the coefficient of variation of X?

  1. 10.0
  2. 1.0
  3. 0.1
  4. 0.32

Answer(s): B

Explanation:

The probability that X lies a distance 10 below the mean is given to be 0.16. Since the normal distribution is symmetric about the mean, this implies that the probability that X will be 10 greater than the mean is also 0.16.
Thus, the probability that X lies between 0 and 20 is 1-0.16-0.16 = 0.68. For a normal distribution, 68% of the observations lie within one standard deviation of the mean. Hence, the standard deviation of X equals 10. The coefficient of variation is then equal to standard deviation/mean = 10/10 = 1.



You wish to determine the number of unique combinations that can result from a process that involves n_1 options in one respect, n_2 in another respect, and so on. The counting method you should use is:

  1. The binomial formula.
  2. The multiplication rule.
  3. The multinomial formula.
  4. The permutation rule.

Answer(s): B

Explanation:

The multiplication rule of counting states that the number of combinations available when there are n_1 options in one aspect, n_2 in another, and so on, up to n_k, is n_1 * n_2 * ... * n_k.






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