QUESTION: 1185

Which one of the following is NOT a condition of the binomial distribution?

Independent trials
Only two outcomes
Probability of success remains constant from trial to trial
At least 10 observations
None of these answers

Answer(s): D

Explanation:

There no requirement regarding the number of observations.

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QUESTION: 1186

Suppose you need $500 in 20 months. How much must you deposit today, if the deposit will earn interest at 8% per year, compounded monthly?

$2,330.48
$437.78
$571.06
$249.93
$107.27

Answer(s): B

Explanation:

On the BAII Plus, press 20 N, 8 divide 12 = I/Y, 0 PMT, 500 FV, CPT PV. On the HP12C, press 20 n, 8 ENTER 12 divide i, 0 PMT, 500 FV, PV. Make sure the BAII Plus has the P/Y value set to 1.

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A study of the opinion of designers with respect to the primary color most desirable for us in executive offices showed that:

Primary Color Number of Opinions
Red 92
Orange 86
Yellow 46
Green 91

Blue 37
Indigo 46
Violet 2

What is the probability that a designer does not prefer red?

0.73
1.00
0.77
0.23
None of these answers

Answer(s): C

Explanation:

There are 400 opinions of which 92 prefer red. The other 308 do not prefer red. Therefore the probability of not preferring red is 308/400 = 0.77.

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QUESTION: 1188

Events A and B are mutually exclusive. P(A) = 0.45, P(B) = 0.27. The probability of neither A nor B occurring equals ________.

0.28
0.88
0.72
0.12

Answer(s): A

Explanation:

The probability of neither A nor B occurring equals one minus the probability of either A or B occurring i.e. P (neither A nor B) = 1 - P(A or B). Now,
P(A or B) = P(A) + P(B) - P(A and B).
Also, for mutually exclusive events, P(A and B) = 0 by definition. Therefore, P(A or B) = 0.45 + 0.27 = 0.72. Finally, P(neither A nor B) = 1 - P(A or B) = 1 - 0.72 = 0.28.

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Free CFA-Level-I Exam Braindumps (page: 297)

QUESTION: 1185

Explanation:

QUESTION: 1186

Explanation:

QUESTION: 1187

Explanation:

QUESTION: 1188

Explanation: