If you deposit $100 a month, beginning next month, for 20 years into an account paying 6% per year, compounded monthly, how much is in your account after that last deposit?
Answer(s): A
On the BAII Plus, press 240 N, 6 divide 12 = I/Y, 0 PV, 100 PMT, CPT FV. On the HP12C, press 240 n, 6 ENTER 12 divide i, 0 PV, 100 PMT, FV. On the BAII Plus, make sure the value of P/Y is set to 1. Note that the answer is displayed as a negative number.
How many annual deposits of $1,000, beginning next year, would you need to make before you had accumulated $30,000, if the money earns 8% per year, compounded annually? Assume the account begins with a $0 balance.
On the BAII Plus, press 8 I/Y, 0 PV, 1000 PMT, 30000 +/- FV, CPT N. On the HP12C, press 8 i, 0 PV, 1000 PMT, 30000 CHS FV, n. Note that the HP12C will display 16 as the answer.
You are examining a portfolio composed of 10% money-market investments, 30% bonds, and 60% stocks. Last year, the return on the money-market investments was 4%; the return on bonds was 9%, and the return on stocks was -11%. What is the portfolio weighted average return?
Answer(s): C
The portfolio weighted-average mean return is equal to the sum (as i goes from 1 to n) of w_i * X_i, where w_i is the percentage weight in the portfolio of the ith asset, and X_i is the investment return of the ith asset. Here, we get a weighted mean of 0.10 * 0.04 + 0.30* 0.09 + 0.60 * -0.11 = -3.50%. None of these answers is correct.
Which of the following statements regarding hypothesis testing is false?
Remember that when the null hypothesis is rejected, the results of the regression are said to be "statistically significant." In other words, the analyst has enough reason to assume that the results of the analysis are valid at the given level of significance. When the analyst fails to reject the null hypothesis, then the result is said to "not be statistically significant." While this specification may seem excessive, it is nevertheless important. The remaining answers are all correct.
What annual interest rate, compounded annually, would cause a series of 20 deposits of $1,000 to accumulate to $40,000, if the first deposit is made one year from today?
On the BAII Plus, press 20 N, 0 PV, 1000 PMT, 40000 +/- FV, CPT I/Y. On the HP12C, press 20 n, 0 PV, 1000 PMT, 40000 CHS FV, i. Make sure that the BAII Plus has the P/Y value set to 1.
Post your Comments and Discuss Test Prep CFA-Level-I exam prep with other Community members:
Our website is free, but we have to fight against AI bots and content theft. We're sorry for the inconvenience caused by these security measures. You can access the rest of the CFA-Level-I content, but please register or login to continue.