QUESTION: 609

In computing skewness, which of the following is true?

It uses the cubed deviation from the mean.
II. It raises the deviation from the mean to the third power.
III. The formula preserves the direction of the deviation.
I and III
II and III
I, II, and III
None of these answers is correct.

Answer(s): C

Explanation:

I and II are true and equivalent. III is true because the cube of a negative number is still a negative number: -2 * -2 * -2 = -8.

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QUESTION: 610

How much must you deposit today if you wish to have $30,000 in 20 years, assuming that interest accumulates at 8% per year, compounded annually?

$6,436.45
$7,046.51
$3,000.00
$5,045.65
$6,604.73

Answer(s): A

Explanation:

On the BAII Plus, press 20 N, 8 I/Y, 0 PMT, 30000 FV, CPT PV. On the HP12C, press 20 n, 8 i, 0 PMT, 30000 FV, PV. Note that the answer is displayed as a negative number. Make sure that the BAII Plus has the P/Y value set to 1.

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QUESTION: 611

An investment of $2,300 grows to $2,904 in 4 years. The annually compounded rate of return is:

6.00%
6.25%
5.90%
6.37%

Answer(s): A

Explanation:

Let r be the annually compounded rate. Then, 2904 = 2300*(1+r)^4. Hence, r = (2904/2300)^(1/4) - 1 = 6%

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QUESTION: 612

Assume the least squares equation is Y' = 10 + 20X. What does the value of 10 in the equation indicate?

None of these answers
For each unit increased in X, Y increases by 10
Y intercept
For each unit increased in Y, X increases by 10

Answer(s): C

Explanation:

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. Here a=10.

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Free CFA-Level-I Exam Braindumps (page: 154)

QUESTION: 609

Explanation:

QUESTION: 610

Explanation:

QUESTION: 611

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QUESTION: 612

Explanation:

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