QUESTION: 1145

What annual interest rate, compounded annually, would cause a series of 20 deposits of $1,000 to accumulate to $40,000, if the first deposit is made one year from today?

6.77%
8.03%
7.23%
5.09%
14.98%

Answer(s): A

Explanation:

On the BAII Plus, press 20 N, 0 PV, 1000 PMT, 40000 +/- FV, CPT I/Y. On the HP12C, press 20 n, 0 PV, 1000 PMT, 40000 CHS FV, i. Make sure that the BAII Plus has the P/Y value set to 1.

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QUESTION: 1146

In a statistical regression estimation, the R-square is found to be 63% and the slope coefficient is 0.6. The correlation coefficient between the dependent and the independent variables is ________.

0.60
0.63
0.24
0.79

Answer(s): D

Explanation:

In a univariate regression, the correlation coefficient is the square root of the R-square. Hence, correlation coefficient = sqrt(0.63) = 0.79

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QUESTION: 1147

Which approach to probability is exemplified by the following formula? Prob. of Event happening = No. of times event occurred in the past/Total no. of observations.

A priori approach
None of these answers
Relative frequency approach
Subjective approach

Answer(s): C

Explanation:

When we based the probability on the number of times the events has occurred in the past over the total number of observations, we are using the relative frequency approach.

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Richard Eisenberg, a quantitative analyst with Middle Road Brokerage, has been instructed to perform a statistical analysis to determine the relationship between the volatility of smaller-cap stocks and the quarterly performance of a series of smaller-cap mutual funds. Mr. Eisenberg begins his assignment by formulating and stating a hypothesis. Next, he identifies the appropriate test statistic and the probability distribution for the series. Mr. Eisenberg then progresses to specifying the significance level for the hypothesis test. Now that the first three steps of a hypothesis test have been completed, Mr. Eisenberg should proceed to which of the following? Choose the best answer.

Evaluating the goodness of fit
Collecting the data and performing the calculations
Determining the p-value
None of these answers is correct
Stating the decision rule
Testing for multicolinearity

Answer(s): E

Explanation:

Hypothesis testing involves a series of seven explicit steps:
Step 1: Formulating and stating the hypothesis
Step 2: Identifying the appropriate test statistic and its probability distribution Step 3: Specifying the significance level
Step 4: Stating the decision rule
Step 5: Collecting the data and performing the necessary calculations Step 6: Making the statistical decision
Step 7: Making the economic/investment decision.

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Free CFA-Level-I Exam Braindumps (page: 287)

QUESTION: 1145

Explanation:

QUESTION: 1146

Explanation:

QUESTION: 1147

Explanation:

QUESTION: 1148

Explanation: