QUESTION: 525

You are examining a special group of 5 stock market indices. Of these 5, the returns were 4%, 8%, 12%, 16%, and 10%. What is the population standard deviation of this group of stock market indices?

10%.
4%.
0%.
16%.

Answer(s): B

Explanation:

The population standard deviation is the positive square root of the population variance. The population variance is equal to the sum of the squared differences between each population member and the population mean, divided by the number of items in the population. In this case, we have a mean of 10%. The first squared difference will be (4% - 10%)^2 = 0.0036. The others will be 0.0004, 0.0004, 0.0036, and 0. The sum of these squared differences is 0.008, and divided by 5, we get 0.0016 = 16%%. The square root of this gives us our population standard deviation of 4%.

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QUESTION: 526

Each salesperson in a large department store chain is rated either below average, average, or above average with respect to sales ability. Each salesperson is also rated with respect to his or her potential for advancement either fair, good, or excellent. These traits for the 500 salespeople were cross classified into the following table.

Sales Ability Potential for Advancement
Fair Good Excellent
Below Average 161222
Average 456045
Above Average 9372135

What is the probability that a salesperson selected at random will have above average sales ability and excellent potential for advancement?

0.20
0.50
None of these answers
0.75
0.27

Answer(s): E

Explanation:

We need the prob(above average) = (93 + 72 + 135)/500 and prob(excellent given above average) = 135/300.
Therefore 300/500*135/300 = 0.27

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QUESTION: 527

What is the Net Present Value of this series of annual cash flows at an interest rate of 12% per year: Year 0:
<$14,000>, Year 1: $5,000, Year 2: $4,000, Year 3: $5,000, Year 4 are used to indicate a negative number).

<$379.31>
$114.37
<$77.49>
$51.21
<$245.97>

Answer(s): E

Explanation:

On the BAII Plus, press CF 2nd CLRWork 14000 +/- ENTER DownArrow 5000 ENTER DownArrow DownArrow 4000 ENTER DownArrow DownArrow 5000 ENTER DownArrow DownArrow 4000 ENTER DownArrow DownArrow 2nd Quit. Then press NPV 12 ENTER DownArrow CPT. On the HP12C, press these keys: 14000 CHS BlueShift CFo 5000 BlueShift CFj 4000 BlueShift CFj 5000 BlueShift CFj 4000 BlueShift CFj. Then press 12 i, YellowShift NPV. The "DownArrow" represents the downward-pointing arrow on the top row of the BAII Plus keyboard. Make sure the BAII Plus has the value of P/Y set to 1.

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QUESTION: 528

Your investment rate of return is 6% per year and you invest according to the following schedule:

Beginning of year 1: $100
Beginning of year 2: $200
Beginning of year 3: $300
Beginning of year 4: $400

The amount you will have at the end of year 4 is:

$1,125
$640
$808
$845

Answer(s): A

Explanation:

This is a future value question. The amount at the end of year 4 = 100*(1.06^4) + 200*(1.06^3) + 300*(1.06^2) + 400*1.06 = 1,125

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QUESTION: 525

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QUESTION: 526

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QUESTION: 527

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QUESTION: 528

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