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Free CFA-Level-I Exam Braindumps (page: 232)

Page 231 of 991
PDF with 3963 Questions

If a distribution is heavily right or left skewed, which of the following statistics should not be used as a measure of central tendency?

  1. skewness
  2. mean
  3. median
  4. mode

Answer(s): B

Explanation:

The mean is affected severely by outliers and hence, should not be used as a measure of central tendency with skewed distributions.



What is the annual Internal Rate of Return of this series of annual cash flows: Year 0: <$6,000>, Year 1:
$4,000, Year 2: $3,000, Year 3: $2,000, Year 4: $1,000 (Note that the <> are used to indicate a negative number).

  1. 25.55%
  2. 27.12%
  3. 24.61%
  4. 31.38%
  5. 33.74%

Answer(s): D

Explanation:

On the BAII Plus, press CF 2nd CLRWork 6000 +/- ENTER DownArrow 4000 ENTER DownArrow DownArrow 3000 ENTER DownArrow DownArrow 2000 ENTER DownArrow DownArrow 1000 ENTER DownArrow DownArrow 2nd Quit. Then press Irr CPT. On the HP12C, press these keys: 6000 CHS BlueShift CFo 4000 BlueShift CFj 3000 BlueShift CFj 2000 BlueShift CFj 1000 BlueShift CFj. Then press YellowShift Irr. The "DownArrow" represents the downward-pointing arrow on the top row of the BAII Plus keyboard. Make sure that the BAII Plus has the P/Y value set to 1.



John buys a house that costs $275,000 and agrees to pay for it with a 15 year mortgage at 6% per year, compounded monthly. What is John's monthly payment on the loan?

  1. $2,250.06
  2. $2,320.61
  3. $1,552.12
  4. $1,972.22
  5. $2,218.50

Answer(s): B

Explanation:

On the BAII Plus, press 180 N, 6 divide 12 = I/Y, 275000 PV, 0 FV, CPT PMT. On the HP12C, press 180 n, 6 ENTER 12 divide i, 275000 PV, 0 FV, PMT. Make sure the BAII Plus has the P/Y value set to 1.



Assume you deposit $800 now into an account that had nothing in it previously, make an additional deposit of $800 in 2 years, and a final deposit of $800 in 4 years. How much is in your account in 5 years, if the account earns interest at 8% per year, compounded annually?

  1. $3,047.23
  2. $2,708.29
  3. $4,331.88
  4. $3,120.04
  5. $2,905.51

Answer(s): A

Explanation:

Solve this question by working several compound interest problems, moving each dollar amount over to year 5.
On the BAII Plus, press 5 N, 8 I/Y, 800 PV, 0 PMT, CPT FV, which yields $1,175.46. Then press STO 1, 3 N, CPT FV, which yields $1,007.77. Then press + RCL 1 = STO 1. Then press 1 N, CPT FV, which yields $864.00.
Then press + RCL 1 = to see the answer. On the HP12C, press 5 n, 8 i, 800 PV, 0 PMT, FV. Then press STO 1, 3 n, FV. Then press RCL 1 + STO 1. Then press 1 n, FV. Then press RCL 1 + to see the answer. Note that the answer will be displayed as a negative number. Also note that the value of "N" for each dollar amount is based on the distance from year 5. Make sure that the BAII Plus has the P/Y value set to 1.






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