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  1. Home
  2. CFA Certification
  3. CFA-Level-I Exam
  4. CFA.CFA-Level-I.v2024-01-19.q367 Dumps
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Question 211

Suppose that P(A) = 0.7 and P(AB) = 0.42, find the probability of B given A, P(B|A).

Correct Answer: B
The correct answer is P(B|A) = P(AB)/P(A) = 0.42/0.7 = 0.60.
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Question 212

Which of the following Treasury issues are quoted on the basis of yield in the Wall Street Journal?

Correct Answer: C
Treasury bills are quoted on the basis of yield and discount while the other two are quoted by their price as a percentage of par value.
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Question 213

Which of the following bonds is likely to command the HIGHEST yield, assuming they are all issued by the same entity and have the same maturity?

Correct Answer: C
All bonds have reinvestment risk to different degrees. Callable bonds will have the highest yield because of the call option written by the investors so that the issuer can call the bond before its maturity at a price less than the intrinsic value of bond if interest rates fall.
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Question 214

Rank the following Portfolio Management Processes steps in the appropriate order:

Correct Answer: A
The first step requires a development of the policy statement. The second step implements the plan by constructing the portfolio and then afterwards, monitoring and updating is conducted through a feedback loop.
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Question 215

A trial generates only two results, "success" and "failure." The probability of success is higher than that of failure. The variance of the number of failures in 20 trials equals 2.35. The probability of success on a given trial equals ________.

Correct Answer: B
For a binomial distribution with N trials, with the probability of success = p in each trial, the variance equals Np(1-p). Hence, 20 x p x (1 - p) = 2.35. Solving this gives quadratic equation gives p =
0 .136 or p = 0.864.
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