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Free CFA-Level-I Exam Braindumps (page: 158)

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PDF with 3963 Questions

What is the annual Internal Rate of Return of this series of annual cash flows: Year 0: <$15,000>, Year 1:
$5,000, Year 2: $8,000, Year 3: $11,000? (Note that the <> are used to indicate a negative number).

  1. 27.12%
  2. 23.74%
  3. 25.55%
  4. 26.61%
  5. 24.02%

Answer(s): E

Explanation:

On the BAII Plus, press CF 2nd CLRWork 15000 +/- ENTER DownArrow 5000 ENTER DownArrow DownArrow 8000 ENTER DownArrow DownArrow 11000 ENTER DownArrow DownArrow 2nd Quit. Then press Irr CPT.
On the HP12C, press these keys: 15000 CHS BlueShift CFo 5000 BlueShift CFj 8000 BlueShift CFj 11000 BlueShift CFj Then press YellowShift Irr. The "DownArrow" represents the downward-pointing arrow on the top row of the BAII Plus keyboard. Make sure the BAII Plus has the P/Y value set to 1.



You are examining a group of 4 stock analysts within an industry. The average stock analyst correctly predicts the direction of a given stock 51% of the time. For these analysts, their accuracy has been 40%, 50%, 60%, and 70%. What is the mean absolute deviation of their accuracy from the average?

  1. 12%.
  2. 10%.
  3. 15%.
  4. 9%.

Answer(s): B

Explanation:

The mean absolute deviation = the sum of (as i goes from 1 to n) of the absolute value of (X_i - Xbar), divided by n. Here, we have [|40% - 51%| + |50% - 51%| + |60% - 51%| + |70% - 51%|]/4 = [11% + 1% + 9% + 19%] / 4 = 40%/4 = 10%.



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

  1. For each unit increased in Y, X increases by 20
  2. Y intercept
  3. None of these answers
  4. For each unit increased in X, Y increases by 20

Answer(s): D

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 b = 20.



How much would you need to deposit today in order to be able to withdraw $2,500 in 2 years and $1,500 in 5 years, if the account has nothing in it today and interest is 8% per year, compounded annually?

  1. $2,722.33
  2. $3,429.36
  3. $3,164.22
  4. $4,000.00
  5. $3,378.18

Answer(s): C

Explanation:

Work this question as two compound interest problems. On the BAII Plus, press 2 N, 8 I/Y, 0 PMT, 2500 FV, CPT PV, which yields $2,143.35. Then press STO 1. Then press 5 N, 1500 FV, CPT PV, which yields $1,020.87. Then press + RCL 1 = to see the answer. On the HP12C, press 2 n, 8 i, 0 PMT, 2500 FV, PV. Then press STO 1. Then press 5 n, 1500 FV, PV. Then press RCL 1 + to see the answer. Note that the answer will be displayed as a negative number.






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