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Free CFA-Level-I Exam Braindumps (page: 270)

Page 269 of 991
PDF with 3963 Questions

If you want $1,000,000 when you retire in 25 years, how much must you deposit each month, beginning one month from today, if your funds will earn 9% per year, compounded monthly?

  1. $7,336.35
  2. $903.59
  3. $$29,848.16
  4. $891.96
  5. $29,848.16

Answer(s): D

Explanation:

Note that since the deposits are made monthly, there are 300 of them (25 x 12 = 300). On the BAII Plus, press 300 N, 9 divide 12 = I/Y, 0 PV, 1000000 FV, CPT PMT. On the HP12C, press 300 n, 9 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 value of P/Y set to 1.



If alpha equals 0.05 for a two-tailed hypothesis test, how large is the area of rejection in the upper or right tail?

  1. 0.975
  2. 0.025
  3. 0.05
  4. 0.95
  5. None of these answers

Answer(s): B

Explanation:

If it is a two tailed test, then there is a similar size region in each tail. So 0.05/2 = 0.025.



Two sets of observations, A and B, each contain 160 observations. The variance of data in A equals 198.4 and that of the data in B equals 231.9. The two sets have the same mean. Then, A has a ________ dispersion and a ________ coefficient of variation.

  1. higher; higher
  2. lower; higher
  3. lower; lower
  4. higher; lower

Answer(s): C

Explanation:

B has a higher variance and hence, a higher dispersion. The coefficient of variation equals the standard deviation divided by the mean. Since A and B have the same mean, B has a higher coefficient of variation.



If the null hypothesis that two means are equal is in fact true, where will 97% of the computed z-value lie between?

  1. +/- 2.07
  2. +/- 2.33
  3. +/- 2.17
  4. none of these answers
  5. +/- 2.58

Answer(s): C

Explanation:

From the z tables, we can find 0.97/2 = 0.485, which corresponds to a z-value of +/-2.17.






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