Financial Institute CFA Level I Chartered Analyst® CFA Level 1 Exam Questions in PDF

Free Financial CFA Level 1 Dumps Questions (page: 127)

What is the remaining balance on a $90,000 loan after making monthly payments of $660.39 for 10 years, if the interest rate is 8% per year, compounded monthly?

  1. $51,948.80
  2. $81,343.92
  3. $0
  4. $76,204.11
  5. $78,951.89

Answer(s): E

Explanation:

On the BAII Plus, press 120 N, 8 divide 12 = I/Y, 90000 PV, 660.39 +/- PMT, CPT FV. On the HP12C, press 120 n, 8 ENTER 12 divide i, 90000 PV, 660.39 CHS PMT, FV. The remaining balance will be displayed as a negative number. Make sure the BAII Plus has the P/Y value set to 1.



What is the Net Present Value of this series of annual cash flows at an interest rate of 14% per year: Year 0:
<$4,000>, Year 1: $2,000, Year 2: $0, Year 3: $0, Year 4 to indicate a negative number).

  1. $214.37
  2. <$67.49>
  3. $122.71
  4. $1.21
  5. <$179.41>

Answer(s): C

Explanation:

On the BAII Plus, press CF 2nd CLRWork 4000 +/- ENTER DownArrow 2000 ENTER DownArrow DownArrow 0 ENTER DownArrow DownArrow 0 ENTER DownArrow DownArrow 4000 ENTER DownArrow DownArrow 2nd Quit. Then press NPV 14 ENTER DownArrow CPT. On the HP12C, press these keys: 4000 CHS BlueShift CFo 2000 BlueShift CFj 0 BlueShift CFj 0 BlueShift CFj 4000 BlueShift CFj. Then press 14 i, YellowShift NPV.
The "DownArrow" represents the downward-pointing arrow on the top row of the BAII Plus keyboard. Make sure the BAII Plus has the P/Y value set to 1.



You are examining a group of 20 mutual funds. You find that 5 have an 8% position in foreign stocks, 7 have a 9% position in foreign stocks, and 8 have no position in foreign stocks. What is the weighted average position in foreign stocks of these 20 mutual funds?

  1. 5.10%.
  2. 5.20%.
  3. 5.25%.
  4. 5.15%.

Answer(s): D

Explanation:

A weighted-average is equal to the sum (as i goes from 1 to n) of w_i * X_i, where w_i is the percentage weight of the ith item, and X_i is the value of the ith item. Here, we get a weighted mean of 5/20 * 0.08 + 7/20 * 0.09 + 8/20 * 0 = 5.15%.



If you deposit $300 a month, beginning next month, for 10 years into an account paying 8% per year, compounded monthly, how much is in your account after that last deposit?

  1. $38,444,973.53
  2. $30,000.00
  3. $54,883.81
  4. $3,091.62
  5. $58,402.98

Answer(s): C

Explanation:

On the BAII Plus, press 120 N, 8 divide 12 = I/Y, 0 PV, 300 PMT, CPT FV. On the HP12C, press 120 n, 8 ENTER 12 divide i, 0 PV, 300 PMT, FV. On the BAII Plus, make sure the value of P/Y is set to 1. Note that the answer is displayed as a negative number.



The sum of the squares of 1,200 observations equals 9,830. The sum of the observations equals 1,510. The population standard deviation of the observations equals ________.

  1. 4.22
  2. 2.57
  3. 5.31
  4. 6.61

Answer(s): B

Explanation:

For N observations, it is easy to show that
population variance*N = (sum of squares) - N*(mean^2)
The mean equals 1,510/1,200 = 1.258. Hence, population variance = (9,830 - 1,200*1.258^2 )/1,200= 6.608.
The standard deviation then equals sqrt(6.608) = 2.57
Note: You should be careful about the difference between population variance and sample variance. The formula for sample variance is:
sample variance*(N-1) = (sum of squares) - N*(mean^2)
You can expect an exam question which asks for population variance, with the choices given containing both the population and the sample variances or vice versa.



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