CFA Level 1 Certification Exam Questions with AI Explanations

QUESTION: 531

Which of the following is not true regarding the normal distribution?

It is symmetrical
It has a single peak
None of these answers
Mean, median and mode are all equal
The points of the curve meet the X-axis at z = -3 and z = 3

Answer(s): E

Explanation:

Nothing is stated about the points where the curve meets the X axis (does it meet at all?)

QUESTION: 532

You wish to count the number of ways in which n objects can be assigned to k different categories, with n_i members in the ith category. The counting method you should use is:

The permutation rule.
The binomial formula.
None of these answers is correct.
The multinomial formula.

Answer(s): D

Explanation:

The number of ways that you can arrange n objects so that there are n_1 of one kind, n_2 of another kind, and so on, up to n_k of a kth kind, is found by using the multinomial formula: n! / [(n_1)! * (n_2)! * ... * (n_k)!].

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QUESTION: 533

If you owe 3 debts ($800 due 3 months from now, $900 due 7 months from now, and $1,200 due 11 months from now), what single payment can you make today to settle them, if interest is assessed at 10% per year, compounded monthly?

$2,387.29
$2,600.00
$3,552.39
$2,724.84
$2,504.88

Answer(s): D

Explanation:

Find the answer to this question by solving 3 compound interest problems. On the BAII Plus, press 3 N, 10 divide 12 = I/Y, 0 PMT, 800 FV, CPT PV which yields $849.21. Then press STO 1. Then press 7 N, 900 FV, CPT PV, which yields $780.33. Then press + RCL 1 = STO 1. Then press 11 N, 1200 FV, CPT PV, which yields $1,095.31. Press + RCL 1 = to see the answer. On the HP12C, press 3 n, 10 ENTER 12 divide i, 0 PMT, 800 FV, PV. Then press STO 1. Then press 7 n, 900 FV, PV. Then press RCL 1 + STO 1. Then press 11 n, 1200 FV, PV. Press RCL 1 + to see the answer. Make sure the BAII Plus has the P/Y value set to 1.

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