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Free CFA-Level-I Exam Braindumps (page: 294)

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You are examining the return on equity ratios of the nation's commercial airlines. You have calculated the mean ROE to be 8%, and the sum of the squared ROEs is 0.27. Assuming there are 30 commercial airlines, what is the population standard deviation of ROEs in this industry?

  1. 5.1%.
  2. 7.9%.
  3. 8.0%.
  4. 5.0%.

Answer(s): A

Explanation:

The population standard deviation is the positive square root of the population variance. The population variance is equal to the sum of the squared differences between each population member and the population mean, divided by the number of items in the population. There is, however, an equivalent alternate formula that is more often used for large amounts of calculation. It is equal to the average squared observation less the squared mean. In this case, we have the average squared observation will be 0.27 / 30 = 0.009, less the squared mean of 8%. We have 0.009 - 0.0064 = 0.0026 = 26%%. The square root of this number, 5.1%, will be the population standard deviation.



The U.S. Department of Education reported that for the past seven years 4,033, 5,652, 6,407, 7,201, 8,719, 11,154, and 15,121 people received bachelor's degrees in computer and information sciences. What is the mean annual number receiving this degree?

  1. None of these answers
  2. About 6,217
  3. About 8,327
  4. About 15,962
  5. About 12,240

Answer(s): C

Explanation:

(4033 + 5652 + 6407 + 7201 + 8719 + 11154 + 15121)/7 = 8327



What do we call the conditions under which the null hypothesis is not rejected?

  1. Critical value
  2. Decision rule
  3. Alternate hypothesis
  4. None of these answers
  5. Test statistic

Answer(s): B

Explanation:

The decision rule lays out the conditions under which we may compare the z values and decide whether or not to reject the hypothesis.



If the alternative hypothesis states that u(Mu) > 6,700, what is the rejection region for the hypothesis test?

  1. Center
  2. None of these answers
  3. Lower tails
  4. Upper tail
  5. Both tails

Answer(s): D

Explanation:

Since the alternative is that Mu is bigger than the mean, then it will be located at the upper tail.






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