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Free CFA-Level-I Exam Braindumps (page: 279)

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PDF with 3963 Questions

A study of 200 stamping firms revealed these incomes after taxes:

Income After Taxes Number of Firms
Under $1 million 102
$1 million up to $20 million 61
$20 million and more 37

What is the probability that a particular firm selected has $1 million or more in income after taxes?

  1. 0.25
  2. 0.49
  3. 0.00
  4. 0.51
  5. None of these answers

Answer(s): B

Explanation:

There are 200 firms altogether. 98 firms have more than a million in income. So 98/200 = 0.49



Fifteen accounting majors had an average grade of 90 on a finance exam. Seven marketing majors averaged 85, while ten finance majors averaged 93 on the same exam. What is the weighted mean for the 32 students taking the exam?

  1. None of these answers
  2. 89.33
  3. 89.48
  4. Impossible to determine without more information
  5. 89.84

Answer(s): E

Explanation:

(15*90)+(7*85)+(10*93) = 2875. Therefore, the weighted mean will be 2875/32 = 89.84.



The probability that a value from a normal distribution will be less than 4 equals 83%. If the distribution has a mean of 2.2, the standard deviation of the distribution must be:

  1. 2.21
  2. 0.96
  3. 1.89
  4. 3.77

Answer(s): C

Explanation:

Using the Normal probability tables, the z-value of the observation, X, which can be exceeded with a probability of 17% equals 0.955. We are given that X = 4. Now, the z-value of a selected observation, X, from a normal distribution with mean M and standard deviation S equals z = (X-M)/S. Therefore, 0.955 = (4 - 2.2)/S. This gives S = 1.885.



The significance level in hypothesis testing refers to the probability that we will:

  1. Reject the alternative when it is true.
  2. Reject the null when it is true.
  3. Accept the alternative when it is true.
  4. Fail to reject the null when it is false.

Answer(s): B

Explanation:

Note that the significance level is the same as the probability of making a Type I error. A Type I error refers to the event that we will reject the null when, in fact, it is true. Clearly, lower significance levels are better, all else equal.






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