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Free CFA-Level-I Exam Braindumps (page: 165)

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PDF with 3963 Questions

A stock has the following returns over 3 years: +2%, +15%, +25%. The annual geometric rate of return over the three years is ________.

  1. 7.42%
  2. 19.36%
  3. 11.31%
  4. 9.34%
  5. 12.21%
  6. 10.15%
  7. 14.64%
  8. 13.61%

Answer(s): H

Explanation:

The annual geometric rate of return equals [(1+2%)(1+15%)(1+25%)]^(1/3) - 1 = (1.02 * 1.15 * 1.25)^0.33 - 1 = 0.1361 = 13.61%



What annual interest rate, compounded annually, would cause a series of 30 deposits of $500 to accumulate to $50,000, if the first deposit is made one year from today?

  1. 9.04%
  2. 10.12%
  3. 7.32%
  4. 5.38%
  5. 10.09%

Answer(s): C

Explanation:

On the BAII Plus, press 30 N, 0 PV, 500 PMT, 50000 +/- FV, CPT I/Y. On the HP12C, press 30 n, 0 PV, 500 PMT, 50000 CHS FV, i. Make sure the BAII Plus has the P/Y value set to 1.



A true-false test consists of six questions. If you guess the answer to each question, what is the probability of getting all six questions correct?

  1. None of these answers
  2. 0
  3. 0.06250
  4. 0.03125
  5. 0.0156

Answer(s): E

Explanation:

This is binomial distribution with p = 0.5, q = 0.5, n = 6, r = 6. Therefore 6!(0.5^6)(0.5^0)/6!0! = 0.0156.



If the decision in the hypothesis test of the population correlation is to reject the null hypothesis, what can we conclude about the population correlation?

  1. None of these answers is correct
  2. Is not zero
  3. Equals the computed sample correlation
  4. Is zero
  5. Could be zero

Answer(s): B

Explanation:

The Ho is always stated as Ho: Population parameter=0. So if we reject Ho, we say that it is not zero.






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