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Free CFA-Level-I Exam Braindumps (page: 155)

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PDF with 3963 Questions

What quarterly payment would you have to make to pay off a $5,000 debt in 7 years, assuming the first payment is made 3 months from today and interest accrues at 6% per year, compounded quarterly?

  1. $220.01
  2. $72.96
  3. $145.01
  4. $372.96
  5. $757.78

Answer(s): A

Explanation:

On the BAII Plus, press 28 N, 6 divide 4 = I/Y, 5000 PV, 0 FV, CPT PMT. On the HP12C, press 28 n, 6 ENTER 4 divide i, 5000 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. The value of "N" is set to 28 since there are 28 quarters in 7 years (7 x 4 =
28).



If you deposit $1,202.50 into an account paying 6% per year simple interest, how much interest will you have earned in 2 years?

  1. $124.00
  2. $126.80
  3. $120.50
  4. $112.50
  5. $144.30

Answer(s): E

Explanation:

Since this is a simple interest question, the formula is I=PRT, with T here being 2, since the timeframe is 2 years. On the BAII Plus, press 1202.50 x 0.06 x 2 = to see the answer. On the HP12C, press 1202.50 ENTER 0.06 x 2 x to see the answer. Since the question asks for the amount of interest earned, the original deposit should not be added to this value.



In a large metropolitan area, past records revealed that 30 percent of all the high school graduates go to college. From 20 graduates selected at random, what is the probability that exactly 8 will go to college?

  1. 0.114
  2. 0.400
  3. 0.231
  4. 0.887
  5. None of these answers

Answer(s): A

Explanation:

This is a binomial probability. The probability of getting r successes out of n trials where the probability of success each trial is p and probability of failure each trial is q (where q = 1-p) is given by: n!(p^r)[q^(n-r)]/r!(n-r)!.
Here n = 20, r = 8,p = 0.3 and q = 0.7. Therefore we have 20!(0.3^8)(0.7^12)/8!12! = 0.114.



The following is a distribution of monthly commissions:

Monthly Commissions Class Frequencies

$600 - $7993
$800 - $9997
$1,000 - $1,19911
$1,200 - $1,39922
$1,400 - $1,59940
$1,600 - $1,79924
$1,800 - $1,9999
$2,000 - $2,1994

Referring to the table above, what is the relative frequency of those salespersons that earn more than $1,599?

  1. 25.5%
  2. None of these answers
  3. 29.5%
  4. 27.5%
  5. 30.8%

Answer(s): E

Explanation:

This is found by adding up all the frequencies of the classes above $1599. In this case 24 + 9 + 4 = 37. Then we divide this by the total frequencies, which is 120. Therefore, 37/120 = 30.8%






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