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NEW QUESTION 48
An indefinite integral of a polynomial function is
- A. always positive
- B. always less than the function itself
- C. always increasing
- D. none of the above
Answer: D
NEW QUESTION 49
I have $5m to invest in two stocks: 75% of my capital is invested in stock 1 which has price 100 and the rest is invested in stock 2, which has price 125. If the price of stock 1 falls to 90 and the price of stock 2 rises to 150, what is the return on my portfolio?
- A. -5%
- B. -2.50%
- C. 5%
- D. 2.50%
Answer: B
NEW QUESTION 50
If a time series has to be differenced twice in order to be transformed into a stationary series, the original series is said to be:
- A. differential
- B. non-linear
- C. integrated of order 2
- D. non-functional
Answer: C
NEW QUESTION 51
In a binomial tree lattice, at each step the underlying price can move up by a factor of u = 1.1 or down by a factor of . The continuously compounded risk free interest rate over each time step is 1% and there are no dividends paid on the underlying. The risk neutral probability for an up move is:
- A. 0.5290
- B. 0.5286
- C. 0.5292
- D. 0.5288
Answer: D
NEW QUESTION 52
Consider an investment fund with the following annual return rates over 8 years: +6%, -6%, +12%, -12%,
+3%, -3%, +9%, -9% .
What can you say about the annual geometric and arithmetic mean returns of this investment fund?
- A. The arithmetic mean return is negative and the geometric mean return is zero
- B. None of the above
- C. The arithmetic mean return is equal to the geometric mean return
- D. The arithmetic mean return is zero and the geometric mean return is negative
Answer: D
NEW QUESTION 53
The correlation between two asset returns is 0.5. What is the largest eigenvalue of their correlation matrix?
- A. 0.5
- B. 1.5
- C. 0
- D. None of the above
Answer: B
NEW QUESTION 54
Which of the following statements is not correct?
- A. A function is a rule that assigns to every value x at least one value of y.
- B. For finite and small domains, the action of a function may be specified by a list.
- C. Every linear function is also a quadratic function.
- D. A function is defined by its domain together with its action.
Answer: A
NEW QUESTION 55
Every covariance matrix must be positive semi-definite. If it were not then:
- A. All the above statements are true
- B. Some portfolios could have a negative variance
- C. It could not be used to simulate correlated asset paths
- D. The associated correlation matrix would not be positive semi-definite
Answer: A
NEW QUESTION 56
Simple linear regression involves one dependent variable, one independent variable and one error variable. In contrast, multiple linear regression uses...
- A. Many dependent variables, many independent variables, many error variables
- B. One dependent variable, many independent variables, one error variable
- C. Many dependent variables, one independent variable, one error variable
- D. One dependent variable, one independent variable, many error variables
Answer: B
NEW QUESTION 57
Consider two securities X and Y with the following 5 annual returns:
X: +10%, +3%, -2%, +3%, +5%
Y: +7%, -2%, +3%, -5%, +10%
In this case the sample covariance between the two time series can be calculated as:
- A. 0.40729
- B. 0.32583
- C. 0.00109
- D. 0.00087
Answer: C
NEW QUESTION 58
What is the maximum value of the function F(x, y)=x2+y2 in the domain defined by inequalities x 1, y -2, y-x 3 ?
- A. 0
- B. 1
- C. 2
- D. 3
Answer: D
NEW QUESTION 59
An operational risk analyst models the occurrence of computer failures as a Poisson process with an arrival rate of 2 events per year. According to this model, what is the probability of zero failures in one year?
- A. 0.14
- B. 0.25
- C. 0.50
- D. 0.02
Answer: A
NEW QUESTION 60
Let X be a random variable distributed normally with mean 0 and standard deviation 1. What is the expected value of exp(X)?
- A. E(exp(X)) = 1.6487
- B. E(exp(X)) = 0.6065
- C. E(exp(X)) = 1
- D. E(exp(X)) = 2.7183
Answer: A
NEW QUESTION 61
Suppose a discrete random variable can take on the values -1, 0 and 1 each with a probability of 1/3. Then the mean and variance of the variable is
- A. mean is 0, variance is 1/2
- B. mean is 0, variance is 1/3
- C. mean is 0, variance is 2/3
- D. mean is 1/3, variance is 1/3
Answer: C
NEW QUESTION 62
Find the roots, if they exist in the real numbers, of the quadratic equation
- A. -4 and 2
- B. No real roots
- C. 1 and 0
- D. 4 and -2
Answer: B
NEW QUESTION 63
The Newton-Raphson method
- A. can be used for continuous but not differentiable functions
- B. does provide an error bound along with every iteration
- C. is based on Taylor series and uses the first derivative
- D. is based on finding a middle point between left and right end of the search interval
Answer: C
NEW QUESTION 64
Which of the provided answers solves this system of equations?
2y - 3x = 3y +x
y2 + x2 = 68
- A. x = -2; y = -8
- B. x = 2; y = 8
- C. x = 2; y = -8
- D. x = 1; y = square root of 67
Answer: C
NEW QUESTION 65
A typical leptokurtotic distribution can be described as a distribution that is relative to a normal distribution
- A. peaked and thin at the center and with heavy (fat) tails
- B. flat and thick at the center and with heavy (fat) tails
- C. peaked and thin at the center and with thin tails
- D. flat and thick at the center and with thin tails
Answer: A
NEW QUESTION 66
Which of the following statements concerning class intervals used for grouping of data is correct?
When grouping data, attention must be paid to the following with regards to class intervals:
1. Class intervals should not overlap
2. Class intervals should be of equal size unless there is a specific need to highlight data within a specific subgroup
3. The class intervals should be large enough so that they not obscure interesting variation within the group
- A. Statements 1 and 3 are correct
- B. All three statements are correct
- C. Statements 2 and 3 are correct
- D. Statements 1 and 2 are correct
Answer: D
NEW QUESTION 67
Suppose that f(x) and g(x,y) are functions. What is the partial derivative of f(g(x,y)) with respect to y?
- A. f'(g(x,y))
- B. f'(g(x,y)) dg/dy
- C. f(dg/dy)
- D. f(g(x,y)) dg/dy
Answer: B
NEW QUESTION 68
Solve the simultaneous linear equations: x + 2y - 2 = 0 and y - 3x = 8
- A. x = 1, y = 0.5
- B. x = -2, y = 2
- C. x = 2, y = 0
- D. None of the above
Answer: B
NEW QUESTION 69
Let f(x) = c for x in [0,4] and 0 for other values of x.
What is the value of the constant c that makes f(x) a probability density function; and what if f(x) = cx for x in
[0,4]?
- A. 1/4 and 1/6
- B. 1/7 and 1/9
- C. 1/4 and 1/7
- D. None of the above
Answer: D
NEW QUESTION 70
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