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Test Prep CFA-Level-I Exam
CFA® Level I Chartered Financial Analyst (Page 155 )

Updated On: 12-Feb-2026
Page 155 of 793
PDF with 3963 Questions

What degree of relationship do values of the correlation coefficient (r) with magnitudes close to 1.00 indicate?

  1. Weak
  2. Strong
  3. Moderate
  4. None

Answer(s): B

Explanation:

The closer to 1, the stronger the relationship.



A researcher has a sample of 700 observations from a population whose standard deviation is known to be 1,235.6. The mean of the sample is calculated to be 219.2. The null hypothesis is stated as Ho: mean = 150 and the alternative is non-directional. The p-value in this case equals ________.

  1. 10.16%
  2. 13.88%
  3. 6.94%
  4. 12.82%

Answer(s): B

Explanation:

The z-statistic under the null equals (219.2 - 150)/(1235.6/(700^.5)) = 1.48. Since the alternative is non- directional, you must use a two-tailed test and ask the question, "What is the probability of observing a z- statistic at least as large in magnitude as 1.48?" The answer to this will give you the p- value for this sample under the two-tailed test. The right-tailed probability of observing a z-statistic which is at least as big as 1.48 equals 1.0 - 0.9306 = 0.0694 = 6.94%. The left-tailed probability of observing a z-statistic which is at least as small as - 1.48 also equals 6.94% since the standard normal distribution is symmetrical about zero. Therefore, the p-value of this two-tailed test in this sample equals 6.94%*2 = 13.88%.



In a sample of 2,000 persons, 1,600 favored more strict environmental protection measures. What is the estimated population proportion?

  1. 0.82 or 82%
  2. 0.20 or 20%
  3. 0.16 or 16%
  4. None of these answers
  5. 0.80 or 80%

Answer(s): E

Explanation:

Population proportion is given by 1600/2000 = 0.80



What is the Net Present Value of this series of annual cash flows using an interest rate of 15% per year: Year
0: <$10,000>, Year 1: $5,000, Year 2: $5,000, Year 3: $7,500? (Note that the <> are used to indicate a negative number).

  1. $2,981.21
  2. $5,077.49
  3. $3,059.92
  4. $3,224.98
  5. $3,104.37

Answer(s): C

Explanation:

On the BAII Plus, press CF 2nd CLRWork 10000 +/- ENTER DownArrow 5000 ENTER DownArrow DownArrow 5000 ENTER DownArrow DownArrow 7500 ENTER DownArrow DownArrow 2nd Quit. Then press NPV 15 ENTER DownArrow CPT. On the HP12C, press these keys: 10000 CHS BlueShift CFo 5000 BlueShift CFj 5000 BlueShift CFj 7500 BlueShift CFj Then press 15 i, YellowShift NPV. The "DownArrow" represents the downward-pointing arrow on the top row of the BAII Plus keyboard.



The following are the weekly amounts of welfare payments made by the federal government to a sample of six families: $139, $136, $130, $136, $147 and $136. What is the range?

  1. $52
  2. None of these answers
  3. $14
  4. $17
  5. $0

Answer(s): D

Explanation:

Range = 147 - 130 = 17






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