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Test Prep CFA-Level-I Exam Questions
CFA® Level I Chartered Financial Analyst (Page 108 )

Updated On: 24-Feb-2026
Page 108 of 793
PDF with 3963 Questions

Which of the following is not true regarding the normal distribution?

  1. It is symmetrical
  2. It has a single peak
  3. None of these answers
  4. Mean, median and mode are all equal
  5. The points of the curve meet the X-axis at z = -3 and z = 3

Answer(s): E

Explanation:

Nothing is stated about the points where the curve meets the X axis (does it meet at all?)



You wish to count the number of ways in which n objects can be assigned to k different categories, with n_i members in the ith category. The counting method you should use is:

  1. The permutation rule.
  2. The binomial formula.
  3. None of these answers is correct.
  4. The multinomial formula.

Answer(s): D

Explanation:

The number of ways that you can arrange n objects so that there are n_1 of one kind, n_2 of another kind, and so on, up to n_k of a kth kind, is found by using the multinomial formula: n! / [(n_1)! * (n_2)! * ... * (n_k)!].



If you owe 3 debts ($800 due 3 months from now, $900 due 7 months from now, and $1,200 due 11 months from now), what single payment can you make today to settle them, if interest is assessed at 10% per year, compounded monthly?

  1. $2,387.29
  2. $2,600.00
  3. $3,552.39
  4. $2,724.84
  5. $2,504.88

Answer(s): D

Explanation:

Find the answer to this question by solving 3 compound interest problems. On the BAII Plus, press 3 N, 10 divide 12 = I/Y, 0 PMT, 800 FV, CPT PV which yields $849.21. Then press STO 1. Then press 7 N, 900 FV, CPT PV, which yields $780.33. Then press + RCL 1 = STO 1. Then press 11 N, 1200 FV, CPT PV, which yields $1,095.31. Press + RCL 1 = to see the answer. On the HP12C, press 3 n, 10 ENTER 12 divide i, 0 PMT, 800 FV, PV. Then press STO 1. Then press 7 n, 900 FV, PV. Then press RCL 1 + STO 1. Then press 11 n, 1200 FV, PV. Press RCL 1 + to see the answer. Make sure the BAII Plus has the P/Y value set to 1.



If an investor who has a required rate of return of 7% per year pays $1,000 for a five-year ordinary annuity, the annuity pays ________ per year.

  1. $244
  2. $256
  3. $271
  4. $263

Answer(s): A

Explanation:

If the annuity pays C per year, we have 1,000 = C/0.07*(1-1/(1.07^5)) => C = 1,000*0.07/0.287 = 244.



For a standard normal distribution what is the probability that z is greater than 1.75?

  1. 0.4599
  2. 0.0401
  3. None of these answers
  4. 0.9599
  5. 0.0459

Answer(s): B

Explanation:

The area under the curve for z = 1.75 is 0.4599. Therefore, 0.4599*2 = 0.9198. We want z >1.75. So we want (1 - 0.9198)/2 = 0.0401.






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