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Free CFA-Level-I Exam Braindumps (page: 283)

Page 282 of 991
PDF with 3963 Questions

Which value of r indicates the strongest correlation than 0.40?

  1. +0.48
  2. -0.50
  3. 0
  4. -0.30
  5. None of these answers

Answer(s): B

Explanation:

The bigger the absolute value of r, the stronger the correlation. The sign +/- just shows the direction, not the strength.



If you deposit $202.50 today into an account paying 6% per year simple interest, how much interest will you have earned in 2 years?

  1. $2.50
  2. $20.50
  3. $24.30
  4. $24.00
  5. 226.80

Answer(s): C

Explanation:

Since this is a simple interest question, the formula is I=PRT, with T here being 2, since the timeframe is 2 years. On the BAII Plus, press 202.50 x 0.06 x 2 = to see the answer. On the HP12C, press 202.50 ENTER 0.06 x 2 x to see the answer. Since the question asks for the amount of interest earned, the original deposit should not be added to this value.



If 68% of the observations on a normal distribution fall between -20 and + 60, the mean and the standard deviation of the distribution are:

  1. 20,40
  2. 40,20
  3. 40,40
  4. 20,20

Answer(s): A

Explanation:

Since the normal distribution is symmetrical about the mean, the mean is equal to (-20 + 60)/2 = 20. Further, for a normal distribution, 68% of the observations lie within one standard deviation of the mean. Therefore, the standard deviation equals 60-20 = 40.



If you owe a debt of $3,000 today and also owe $5,000 in 24 months, what single payment could you make 15 months from today that would pay off both of these debts, if interest is assessed at 8% per year, compounded monthly?

  1. $8,024.17
  2. $7,751.62
  3. $7,980.86
  4. $8,000.00
  5. $9,041.93

Answer(s): A

Explanation:

To solve this question, set the problem up as the sum of two compound interest calculations. Move the $3,000 from today over to month 15 and add it to the $5,000 brought back from month 24 to month 15. On the BAII Plus, press 15 N, 8 divide 12 = I/Y, 3000 PV, 0 PMT, CPT FV, which yields $3,314.41. Then press STO 1. Then press 9 N, 5000 FV, CPT PV, which yields $4,709.76. Finally press + RCL 1 = to see the answer. On the HP12C, press 15 n, 8 ENTER 12 divide i, 3000 PV, 0 PMT, FV. Then press STO 1. Then press 9 n, 5000 FV, PV. Finally press RCL 1 + to see the answer. Make sure the BAII Plus has the value of P/Y set to 1.






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