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Free CFA-Level-I Exam Braindumps (page: 134)

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PDF with 3963 Questions

What quarterly payment is required beginning one period from today to pay off a $3,000 debt, if interest accrues at 6% per year, compounded quarterly, and the debt is to be retired in 10 years?

  1. $107.41
  2. $88.63
  3. $114.29
  4. $87.83
  5. $100.28

Answer(s): E

Explanation:

On the BAII Plus, press 40 N, 6 divide 4 = I/Y, 3000 PV, 0 FV, CPT PMT. On the HP12C, press 40 n, 6 ENTER 4 divide i, 3000 PV, 0 FV, PMT. Note that the answer will be displayed as a negative number. Make sure the BAII Plus has the P/Y value set to 1.



Which of the following statements is false regarding confidence levels and/or tests of significance?

  1. In most hypothesis testing, the confidence level is equal to 0.10, 0.05, and 0.01.
  2. All else equal, the confidence interval of a hypothesis test with a 5% level of significance is less than the confidence interval for a hypothesis test with a 1% level of significance.
  3. In most hypothesis tests, the power of the test is equal to (1 - alpha).
  4. More than one of these answers is incorrect.
  5. The significance level of a test is equal to (1 - confidence level).
  6. The power of a test is equal to the confidence level.

Answer(s): D

Explanation:

More than one of these answers is incorrect. Specifically, in most hypothesis tests, the significance level is equal to the probability of a Type I error (denoted by the Greek letter alpha) and the power of the test can be found by (1 - beta), where beta represents the probability of a Type II error. Remember that statisticians are much more concerned with the probability of a Type I error, which is defined as the act of incorrectly rejecting the null hypothesis. A Type II error, which is defined as the act of incorrectly failing to reject the null hypothesis, is much more difficult to predict. Second, power of a test is not equal to the confidence level of the test.



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)!].






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