Question 1

In what way(s) is(are) the concept of geometric mean useful?

Accepted Answer

A)  In evaluating investment returns 
B)  In calculating average growth rates 
C)  In assessing the dispersion of the data 
D)  Both in evaluating investment returns and in calculating average growth rates 
A)  In evaluating investment returns 
B)  In calculating average growth rates 
C)  In assessing the dispersion of the data 
D)  Both in evaluating investment returns and in calculating average growth rates

Question 2

The Yearly Prices (rounded to the nearest dollar) for GLD (a gold exchange traded fund) and SLV (a silver exchange traded fund) are reported in the following table.   (See the Excel Data File.)
A) Calculate the sample variance and sample standard deviation for the GLD ETF and SLV ETF.
B) Which asset had a greater variance?
C) Which asset had the greater relative dispersion?

Accepted Answer

a. For GLD: s² = 662.92; s = 25

Question 3

Approximately 60% of the observations in a data set fall below the 60th percentile.

Accepted Answer

A) True 
 B)False

Question 4

The following is a list of average wind speeds at a local surf spot in California over the last week.   (See the Excel Data File.)
A) What is the range in wind speed?
B) What is the Mean Absolute Deviation of the wind speed?

Accepted Answer

a. Range = 16 Range

Question 5

A bowler's scores for a sample of six games were   The bowler's modal score is ________.

Accepted Answer

A)  172 
B)  174 
C)  178 
D)  190 
A)  172 
B)  174 
C)  178 
D)  190

Question 6

A surfer visited his favorite beach 50 times and recorded the wave height each time in the following table.   (See the Excel Data File.)
A) Calculate the average wave height.
B) Calculate the variance and standard deviation wave height for this sample.

Accepted Answer

a) @#IMG-DLM& = 4.0

Question 7

A luxury apartment complex in South Beach Miami is for sale. The owner has received the following offers in millions of dollars.   (See the Excel Data File.)
A) What is the mean offer price? What is the median offer price? Is the mean a good measure of central location?
B) What is the sample standard deviation of the offers?
C) What is equivalent to a 75th percentile offer?

Accepted Answer

a. Mean = 70. Yes, it is a good measure

Question 8

The following table shows the annual returns (in percent) Chevron and Caterpillar for   .   (See the Excel Data File.)
A) Which fund had the higher arithmetic average return?
B) Which fund was riskier over this time period?
C) Given a risk-free rate of 1%, which fund has the higher Sharpe ratio? What does this imply?

Accepted Answer

a) Arithmetic Mean Chevron =AVERAGE()=0.

Question 9

The following table summarizes selected statistics for two portfolios for a 10-year period. Assume that the risk-free rate is 4% over this period.   As measured by the Sharpe ratio, the fund with the superior risk-adjusted performance during this period is ________.

Accepted Answer

A)  Fund A because it has a lower positive Sharpe ratio than Fund B 
B)  Fund B because it has a lower positive Sharpe ratio than Fund A 
C)  Fund A because it has a higher positive Sharpe ratio than Fund B 
D)  Fund B because it has a higher positive Sharpe ratio than Fund A 
A)  Fund A because it has a lower positive Sharpe ratio than Fund B 
B)  Fund B because it has a lower positive Sharpe ratio than Fund A 
C)  Fund A because it has a higher positive Sharpe ratio than Fund B 
D)  Fund B because it has a higher positive Sharpe ratio than Fund A

Question 10

Which of the following relationships can be concluded from examining the correlation coefficient?

Accepted Answer

A)  No relationship 
B)  A positive relationship 
C)  A negative relationship 
D)  All of the above 
A)  No relationship 
B)  A positive relationship 
C)  A negative relationship 
D)  All of the above

Question 11

John lives in Los Angeles and hates the traffic. He asked a sample of six of his coworkers who live all over Los Angles how many hours they spend commuting every year. These are their responses in hours per year.   (See the Excel Data File.)
A) Calculate and interpret the 30th, 50th, and 70th percentiles.
B) Are there any outliers? Is the distribution symmetric? If not, comment on its skewness.

Accepted Answer

a. 30th percentile =PERCENTILE.EXC(,0.30

Question 12

Which are characteristic(s) of the coefficient of variation?

Accepted Answer

A)  It adjusts for differences in the magnitude of means. 
B)  It has the same units of measurement as the observations. 
C)  It allows for direct comparisons across different data sets. 
D)  Both it adjusts for differences in the magnitude of means and it allows for direct comparisons across different data sets. 
A)  It adjusts for differences in the magnitude of means. 
B)  It has the same units of measurement as the observations. 
C)  It allows for direct comparisons across different data sets. 
D)  Both it adjusts for differences in the magnitude of means and it allows for direct comparisons across different data sets.

Question 13

Professors at a local university earn an average salary of $80,000 with a standard deviation of $6,000. Using Chebyshev's inequality, the percentage of salaries falling between $68,000 and $92,000 is at least ________.

Accepted Answer

A)  68% 
B)  65% 
C)  75% 
D)  95% 
A)  68% 
B)  65% 
C)  75% 
D)  95%

Question 14

The annual returns (in percent) for a sample of stocks in the technology industry over the past year are as follows:   (See the Excel Data File.) The median return is the closest to ________.

Accepted Answer

A)  -6.6 
B)  -5 
C)  0 
D)  2.8 
A)  -6.6 
B)  -5 
C)  0 
D)  2.8

Question 15

Automobiles traveling on a road with a posted speed limit of 65 miles per hour are checked for speed by a state police radar system. The following is a frequency distribution of speeds.   (See the Excel Data File.) The mean speed of the automobiles traveling on this road is the closest to ________.

Accepted Answer

A)  55.0 
B)  57.8 
C)  64.1 
D)  65.0 
A)  55.0 
B)  57.8 
C)  64.1 
D)  65.0

Question 16

The following are daily returns for the Dow Jones Industrial average during the week of October 13. The returns are rounded to the nearest whole number.   (See the Excel Data File.)
A) Calculate the arithmetic mean return.
B) Calculate the geometric mean return.

Accepted Answer

a. 1.2% Arithmetic Mean =AVERA

Question 17

Geometric mean is greater than the arithmetic mean.

Accepted Answer

A) True 
 B)False

Question 18

The terms central location or central tendency refer to the way quantitative data tend to cluster around some middle or central value.

Accepted Answer

A) True 
 B)False

Question 19

The following sample data shows the starting salaries of six graduates from the accounting program at California Polytechnic State University. The data are in thousands of dollars.   (See the Excel Data File.)
A) Calculate and interpret the 25th, 50th, and 75th percentiles.
B) Are there any outliers? Is the distribution symmetric? If not, comment on its skewness.

Accepted Answer

a. 25th percentile is 46; 50th percentil

Question 20

You buy 50 stocks of Company A, 30 of Company B, and 20 of Company C. The annual returns of these companies are 8%, 12%, and 10% respectively. The average return for one year is the closest to ________.

Accepted Answer

A)  9.1% 
B)  9.6% 
C)  10.0% 
D)  10.5% 
A)  9.1% 
B)  9.6% 
C)  10.0% 
D)  10.5%

In what way(s) is(are) the concept of geometric mean useful?

Approximately 60% of the observations in a data set fall below the 60th percentile.

The following is a list of average wind speeds at a local surf spot in California over the last week. (See the Excel Data File.) A) What is the range in wind speed? B) What is the Mean Absolute Deviation of the wind speed?

A bowler's scores for a sample of six games were The bowler's modal score is ________.

A surfer visited his favorite beach 50 times and recorded the wave height each time in the following table. (See the Excel Data File.) A) Calculate the average wave height. B) Calculate the variance and standard deviation wave height for this sample.

The following table summarizes selected statistics for two portfolios for a 10-year period. Assume that the risk-free rate is 4% over this period. As measured by the Sharpe ratio, the fund with the superior risk-adjusted performance during this period is ________.

Which of the following relationships can be concluded from examining the correlation coefficient?

Which are characteristic(s) of the coefficient of variation?

Professors at a local university earn an average salary of $80,000 with a standard deviation of $6,000. Using Chebyshev's inequality, the percentage of salaries falling between $68,000 and $92,000 is at least ________.

The annual returns (in percent) for a sample of stocks in the technology industry over the past year are as follows: (See the Excel Data File.) The median return is the closest to ________.

Automobiles traveling on a road with a posted speed limit of 65 miles per hour are checked for speed by a state police radar system. The following is a frequency distribution of speeds. (See the Excel Data File.) The mean speed of the automobiles traveling on this road is the closest to ________.

The following are daily returns for the Dow Jones Industrial average during the week of October 13. The returns are rounded to the nearest whole number. (See the Excel Data File.) A) Calculate the arithmetic mean return. B) Calculate the geometric mean return.

Geometric mean is greater than the arithmetic mean.

The terms central location or central tendency refer to the way quantitative data tend to cluster around some middle or central value.

You buy 50 stocks of Company A, 30 of Company B, and 20 of Company C. The annual returns of these companies are 8%, 12%, and 10% respectively. The average return for one year is the closest to ________.

Statistics and Data

Tabular and Graphical Methods

Introduction to Probability

Discrete Probability Distributions

Continuous Probability Distributions

Sampling and Sampling Distributions

Interval Estimation

Hypothesis Testing

Statistical Inference Concerning Two Populations

Statistical Inference Concerning Variance

Chi-Square Tests

Analysis of Variance

Regression Analysis

Inference With Regression Models

Regression Models for Nonlinear Relationships

Regression Models With Dummy Variables

Time Series and Forecasting

Returns, Index Numbers, and Inflation

Nonparametric Tests

Filters

Exam 3: Numerical Descriptive Measures

In what way(s) is(are) the concept of geometric mean useful?

Approximately 60% of the observations in a data set fall below the 60th percentile.

The following is a list of average wind speeds at a local surf spot in California over the last week. (See the Excel Data File.) A) What is the range in wind speed? B) What is the Mean Absolute Deviation of the wind speed?

A bowler's scores for a sample of six games were The bowler's modal score is ________.

A surfer visited his favorite beach 50 times and recorded the wave height each time in the following table. (See the Excel Data File.) A) Calculate the average wave height. B) Calculate the variance and standard deviation wave height for this sample.

The following table summarizes selected statistics for two portfolios for a 10-year period. Assume that the risk-free rate is 4% over this period. As measured by the Sharpe ratio, the fund with the superior risk-adjusted performance during this period is ________.

Which of the following relationships can be concluded from examining the correlation coefficient?

Which are characteristic(s) of the coefficient of variation?

Professors at a local university earn an average salary of $80,000 with a standard deviation of $6,000. Using Chebyshev's inequality, the percentage of salaries falling between $68,000 and $92,000 is at least ________.

The annual returns (in percent) for a sample of stocks in the technology industry over the past year are as follows: (See the Excel Data File.) The median return is the closest to ________.

Automobiles traveling on a road with a posted speed limit of 65 miles per hour are checked for speed by a state police radar system. The following is a frequency distribution of speeds. (See the Excel Data File.) The mean speed of the automobiles traveling on this road is the closest to ________.

The following are daily returns for the Dow Jones Industrial average during the week of October 13. The returns are rounded to the nearest whole number. (See the Excel Data File.) A) Calculate the arithmetic mean return. B) Calculate the geometric mean return.

Geometric mean is greater than the arithmetic mean.

The terms central location or central tendency refer to the way quantitative data tend to cluster around some middle or central value.

You buy 50 stocks of Company A, 30 of Company B, and 20 of Company C. The annual returns of these companies are 8%, 12%, and 10% respectively. The average return for one year is the closest to ________.

Statistics and Data

Tabular and Graphical Methods

Introduction to Probability

Discrete Probability Distributions

Continuous Probability Distributions

Sampling and Sampling Distributions

Interval Estimation

Hypothesis Testing

Statistical Inference Concerning Two Populations

Statistical Inference Concerning Variance

Chi-Square Tests

Analysis of Variance

Regression Analysis

Inference With Regression Models

Regression Models for Nonlinear Relationships

Regression Models With Dummy Variables

Time Series and Forecasting

Returns, Index Numbers, and Inflation

Nonparametric Tests

Filters