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Free CFA-Level-I Exam Braindumps (page: 253)

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PDF with 3963 Questions

What semiannual deposit is needed to accumulate $5,000 in 5 years if the account pays 6% per year, compounded semiannually, assuming that the first deposit is made in 6 months and also assuming that the account already has $750 in it today?

  1. $277.44
  2. $436.15
  3. $359.52
  4. $348.23
  5. $778.01

Answer(s): D

Explanation:

On the BAII Plus, press 10 N, 6 divide 2 = I/Y, 750 PV, 5000 +/- FV, CPT PMT. On the HP12C, press 10 n, 6 ENTER 2 divide i, 750 PV, 5000 CHS FV, PMT. Note that the answer this time is a positive number. This means that the $348.23 is a deposit in addition to the $750 original deposit. The $5,000 is entered as a negative number, because the $750 and the $348.23 are deposits and the $5,000 is a withdrawal. Make sure the BAII Plus has the value of P/Y set to 1.



A normal distribution has a mean of -10.8 and a variance of 723.6. The probability that a value from this distribution will be between -25 and + 25 equals ________.

  1. 0.91
  2. 0.30
  3. 0.61
  4. 0.39

Answer(s): C

Explanation:

The standard deviation of the distribution equals sqrt(723.6) = 26.9. The z-value of -25 equals (-25 + 10.8)/26.9 = -0.53. The z-value of + 25 equals (25 + 10.8)/26.9 = + 1.33. Therefore, the probability that a number Y lies between -25 and + 25 is the same as the z-score lying between -0.53 and + 1.33. Using the Normal probability tables, we get P(z < 1.33) = 0.9082. Getting P(z < -0.53) can be tricky when the table given is only for positive values. To calculate the probability, use the fact that the standard normal distribution is symmetrical about zero.
Hence, P(z < - 0.53) = P(z > 0.53) = 1.0 - 0.7019 = 0.2981. The probability that a number Y lies between -25 and + 25 is then given by P(-0.53 < z < 1.33) = P(z < 1.33) - P(z < -0.53) = 0.9082 - 0.2981 = 0.61.



If you buy an item for $1,500 and agree to pay for it with 36 monthly payments of $55.50, beginning next month, what annual interest rate, compounded monthly, are you being charged?

  1. 24.92%
  2. 16.53%
  3. 18.84%
  4. 11.15%
  5. 19.68%

Answer(s): E

Explanation:

The interest rate returned by the calculator will be the periodic interest rate. It must be multiplied by the number of periods per year to have the correct answer. On the BAII Plus, press 36 N, 1500 PV, 55.50 +/- PMT, 0 FV, CPT I/Y. Then press x 12 = to see the answer. On the HP12C, press 36 n, 1500 PV, 55.50 CHS PMT, 0 FV, i.
Then press 12 x to see the answer. Make sure the BAII Plus has the P/Y value set to 1.



The mean weight of trucks traveling on a particular section of I-475 is not known. A state highway inspector needs an estimate of the mean. He selects a random sample of 49 trucks passing the weighing station and finds the mean is 15.8 tons, with a standard deviation of the sample of 3.8 tons. What is the 95 percent interval for the population mean?

  1. 14.7 and 16.9
  2. 16.1 and 18.1
  3. 10.0 and 20.0
  4. None of these answers
  5. 13.2 and 17.6

Answer(s): A

Explanation:

Interval estimate can be found from x_bar +/-z*s/(n^0.5). Here we have n = 49, x_bar = 15.8 and z = 1.96 (for 95%) and s = 3.8. Therefore 15.8 +/- 1.96*3.8/7 and we get 14.76 and 16.84.






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