Test On Quantative Methods For CFA Level 1

20 Questions | Total Attempts: 4728

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Test On Quantative Methods For CFA Level 1

There are 20 questions in this test from the Quantative Methods section of the CFA Level 1 syllabus. You will get 30 minutes to complete the test.


Questions and Answers
  • 1. 
    What percent of the observations will lie above the mean plus two standard deviations?
    • A. 

      5%

    • B. 

      2.5%

    • C. 

      95%

  • 2. 
    A coefficient of skewness of +2.48 indicates:
    • A. 

      The mean is larger than the median

    • B. 

      The tail of the distribution is to the right

    • C. 

      All of these answers are correct

  • 3. 
    If you deposit $250 a month, beginning next month, for 20 years into an account paying 7% per year, compounded monthly, how much is in your account after that last deposit?
    • A. 

      $58,205.58

    • B. 

      $308,663.09

    • C. 

      $130,231.66

  • 4. 
    If you need $25,000 in 10 years, how much must you deposit today, if your money will earn 6% per year, compounded annually?
    • A. 

      $25,000

    • B. 

      $13,959.87

    • C. 

      $2,320.01

  • 5. 
    Suppose you are modelling long-term interest rates, and you believe that supply of corporate debt is a major contributing factor. Suppose you believe that the probability that rates will rise if supply of corporate debt rises is 60%; if the supply of corporate debt stays constant, you believe that there is a 35% chance of increasing interest rates; if the supply of corporate debt falls, you believe that there is a 5% chance of rates increasing. You think that the likelihood of corporate debt increasing is 50%; of staying the same is 40%; of dropping is 10%. What is the unconditional probability of interest rates rising?
    • A. 

      55.4%

    • B. 

      44.5

    • C. 

      55.5

  • 6. 
    Specify the region for the p-statistic which will lead to the rejection of the null at the 80% significance level.
    • A. 

      Z-statistic < -0.84

    • B. 

      Z-statistic > +1.19

    • C. 

      Z-statistic < -1.35 or z-statistic > +1.35

  • 7. 
    A market survey was conducted to estimate the proportion of homemakers who could recognize the brand name of a cleanser based on the shape and colour of the container. Of the 1,400 homemakers, 420 were able to identify the brand name. Using the 0.99 degree of confidence, the population proportion lies within what interval?
    • A. 

      0.250 and 0.350

    • B. 

      0.268 and 0.332

    • C. 

      0.950 and 0.997

  • 8. 
    What annual interest rate, compounded annually, would cause a series of 10 deposits of $500 to accumulate to $9,000, if the first deposit is made one year from today?
    • A. 

      12.52%

    • B. 

      15.38%

    • C. 

      11.12%

  • 9. 
    You have invested in a long-term, fixed deposit account earning 4% per year for 20 years, compounded annually. Your friend has invested in a similar account but one that earns 4.25% per year, compounded semi-annually. If each of you deposited $5,000, by what amount is your friend wealthier than you due to this deposit?
    • A. 

      $538

    • B. 

      $601

    • C. 

      $639

  • 10. 
    You are examining a group of 6 companies. Their average profit margins have been 49%, 10%, 5%, 35%, 30%, and 30%. What is the range of profit margins?
    • A. 

      49.0%

    • B. 

      30.0%

    • C. 

      44.0%

  • 11. 
    If the hypothesized value of a parameter under the null hypothesis lies outside the confidence interval, the null hypothesis:
    • A. 

      Cannot be rejected at the corresponding significance level

    • B. 

      Should be rejected at the corresponding significance level

    • C. 

      None of these answers

  • 12. 
    What sample statistic is used to estimate a population value?
    • A. 

      Point estimate

    • B. 

      Parameter

    • C. 

      Interval estimate

  • 13. 
    What is the area under the normal curve for z > 1.79?
    • A. 

      0.4633

    • B. 

      0.9599

    • C. 

      0.0367

  • 14. 
    Type I error refers to the event that we will:
    • A. 

      Reject the null when it is true

    • B. 

      Fail to reject the null when it is false

    • C. 

      Reject the alternative when it is true

  • 15. 
    You are faced with a counting problem in which you must choose k objects from n total objects. The order of choosing does not matter. The counting method you should use is:
    • A. 

      The binomial formula

    • B. 

      The multinomial formula

    • C. 

      The multiplication rule

  • 16. 
    In a statistical regression estimation, the R-square is found to be 39% and the slope coefficient is -0.3. The percentage of variance of the dependent variable not explained equals ________.
    • A. 

      0.30

    • B. 

      0.61

    • C. 

      0.09

  • 17. 
    A bell-shaped, symmetrical frequency distribution has a mean of 10. If 16% of the observations in the distribution are negative, what is the coefficient of variation of X?
    • A. 

      1.0

    • B. 

      0.32

    • C. 

      10.0

  • 18. 
    A population consists of all the weights of all defensive tackles on 's football team. They are: Johnson, 204 pounds; Patrick, 215 pounds; Junior, 207 pounds; Kendron, 212 pounds; Nicko, 214 pounds; and Cochran, 208 pounds. What is the population standard deviation (in pounds)?
    • A. 

      About 4

    • B. 

      About 40

    • C. 

      None of these answers

  • 19. 
    Sweetwater & Associates write weekend trip insurance at a very nominal charge. Records show that the probability that a motorist will have an accident during the weekend and file a claim is 0.0005. Suppose they wrote 400 policies for the coming weekend, what is the probability that exactly two claims will be filed?
    • A. 

      0.0164

    • B. 

      0.0001

    • C. 

      None of these answers

  • 20. 
    The semiannually compounded rate is 10% quoted on an annualized basis. The equivalent annually compounded rate is:
    • A. 

      10.5%

    • B. 

      9.65%

    • C. 

      10.1%

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