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Free CFA-Level-I Exam Braindumps (page: 225)

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PDF with 3963 Questions

Tom wants to retire a millionaire. If he is 30 years old today, what monthly payment would he need to make beginning one month from today and continuing until he retires on his 65th birthday, if the money will earn 8% per year, compounded monthly?

  1. $670.98
  2. $435.94
  3. $2,380.95
  4. $5,803.26
  5. $439.04

Answer(s): B

Explanation:

The total number of deposits will be 420 (35 years x 12 months/year). On the BAII Plus, press 420 N, 8 divide 12 = I/Y, 0 PV, 1000000 FV, CPT PMT. On the HP12C, press 420 n, 8 ENTER 12 divide i, 0 PV, 1000000 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.



What deposit today is needed to have $4,000 in 4 years, assuming the money will earn interest at 5% per year, compounded monthly?

  1. $3,290.81
  2. $3,276.28
  3. $4,000.00
  4. $384.57
  5. $3,934.02

Answer(s): B

Explanation:

On the BAII Plus, press 48 N, 5 divide 12 = I/Y, 0 PMT, 4000 FV, CPT PV. On the HP12C, press 48 n, 5 ENTER 12 divide i, 0 PMT, 4000 FV, PV. Make sure the BAII Plus has the P/Y value set to 1.



What is the difference between a sample mean and the population mean called?

  1. Sampling error
  2. Point estimate
  3. Standard error of the mean
  4. None of these answers
  5. Interval estimate

Answer(s): A

Explanation:

This is the error incurred when sampling from a population.



What annual interest rate, compounded annually, will cause an original deposit of $400 to grow to $725, after 7 years?

  1. 21.45%
  2. 9.14%
  3. 6.94%
  4. 9.01%
  5. 8.87%

Answer(s): E

Explanation:

On the BAII Plus, press 400 PV, 725 +/- FV, 0 PMT, 7 N, then CPT I/Y. On the HP12C, press 400 PV, 725 CHS FV, 0 PMT, 7 n, then press i. Make sure the BAII Plus has the P/Y value set to 1.






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