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Free CFA-Level-I Exam Braindumps (page: 145)

Page 144 of 991
PDF with 3963 Questions

What is the variable used to predict another variable called?

  1. Important
  2. Causal
  3. Independent
  4. None of these answers
  5. Dependent

Answer(s): C

Explanation:

The dependent variable is the variable Y which is being predicted by the X variable, the independent variable.
The regression is written as Y' = a + bX. The letter "a" is the Y intercept and b is the slope of the line. Y' is the predicted value of Y given a specific value of X.



If you deposit $345 into an account paying 5.45% per year simple interest, how much interest will be earned after 10 months?

  1. $15.67
  2. $360.67
  3. $188.03
  4. $$359.59
  5. $14.59

Answer(s): A

Explanation:

The question only asks for the earned interest, not the total amount in the account. On the BAII Plus, press 345 x 0.0545 x 10 divide 12 = to see the answer. On the HP12C, press 345 ENTER 0.0545 x 10 x 12 divide to see the answer.



If two events A and B are mutually exclusive, what does the special rule of addition state?

  1. P(A and/or B) = P(A) +P(B)
  2. P(A and B) = P(A) + P(B)
  3. None of these answers
  4. P(A or B) = P(A) - P(B)
  5. P(A or B) = P(A) + P(B)

Answer(s): E

Explanation:

The key word is that these events are mutually exclusive. So P(A or B) = P(A) + P(B). The probabilities stand alone.



Assume you deposit $300 now into an account that had nothing in it previously, make an additional deposit of $400 in 1 year, and a final deposit of $200 in 4 years. How much is in your account in 6 years, if the account earns interest at 7% per year, compounded annually?

  1. $418.29
  2. $1,431.88
  3. $1,120.04
  4. $925.51
  5. $1,240.22

Answer(s): E

Explanation:

Solve this question by working several compound interest problems, moving each dollar amount over to year 5.
On the BAII Plus, press 6 N, 7 I/Y, 300 PV, 0 PMT, CPT FV, which yields $450.22. Then press STO 1, 5 N, 400 PV, CPT FV, which yields $561.02. Then press + RCL 1 = STO 1. Then press 2 N, 200 PV, CPT FV, which yields $228.98. Then press + RCL 1 = to see the answer. On the HP12C, press 6 n, 7 i, 300 PV, 0 PMT, FV.
Then press STO 1, 5 n, 400 PV, FV. Then press RCL 1 + STO 1. Then press 2 n, 200 PV, FV. Then press RCL 1 + to see the answer. Note that the answer will be displayed as a negative number. Also note that the value of "N" for each dollar amount is based on the distance from year 6.






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