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Free CFA-Level-I Exam Braindumps (page: 207)

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PDF with 3963 Questions

The weekly mean income of a group of executives is $1,000 and the standard deviation of this group is $100. The distribution is normal. What percent of the executive have an income of $925 or less?

  1. About 23%
  2. About 15%
  3. About 85%
  4. About 50%
  5. None of these answers

Answer(s): A

Explanation:

z = (x-u)/sigma = 925 - 1000/100 = -0.75. From z-table z = 0.75 is 0.2734. So 1.0 - 0.7734 = 0.2266.



A stock's return has a mean of 6% and a coefficient of variation of 2. Its variance equals

  1. 144%%
  2. 3%%
  3. 6%%
  4. 12%%

Answer(s): A

Explanation:

Coefficient of variation = standard deviation/mean. Therefore, standard deviation = 2*6 = 12. Variance = 12^2 =



The coefficient of determination measures:

  1. The percentage change in the dependent variable caused by a 1% change in the independent variable.
  2. The degree of linear association between the dependent and the independent variables.
  3. the slope of the regression line.
  4. The amount of variance of the dependent variable explained by the independent variable.

Answer(s): D

Explanation:

The coefficient of determination, also known as the R-square of the regression, measures the amount of variance of the dependent variable explained by the independent variable.



Which of the following statements regarding the coefficient of correlation is true?

  1. It ranges from -1.0 to +1.0 inclusive
  2. A value of 0.00 indicates two variables are not related
  3. None of these answers
  4. All of these answers
  5. It measures the strength of the relationship between two variables

Answer(s): D

Explanation:

All of these answers are properties of the coefficient of correlation. Make sure you know the formula for the coefficient of correlation.






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