CFA Level 1 Test Questions | Questions with 100% Correct Answers | Updated & Verified
Allen Jabber invested $400 at the beginning of the last 12 months in the shares of a mutual fund that paid no dividends. Which Method will he correctly choose to calculate his average price per share from the monthly share prices? a) Arithmetic Mean b) Harmonic Mean c) Geometric Mean - Harmonic Mean - The harmonic mean of the 12 purchase prices will be his average price paid per share. Colonia has 2 political parties, the Wigs and the Wags. If the Wags are elected there is a 32% probability of a tax increase over the next 4 years. If the Wigs are elected there is a 60% probability of a tax increase. There is a 20% probability the that the Wags will be elected. The sum of the (unconditional) probability of a tax increase and the joint probability that the wigs will be elected and there will be no tax increase is closest to: a) 55% b) 70% c) 85% - 86.4% = C The unconditional probability of a tax increase is: 0.2(0.32) + 0.8(0.6) = 54.4%. The joint probability that the Wigs will be elected and there will be no tax increase is: 0.8(0.4) = 32%. The sum is: 54.4 + 32 = 86.4%. An analyst who wants to display the relationship between two variables graphically is most likely to use: a) a histogram b) a scatterplot
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