Seeing is believing!
Before you order, simply sign up for a free user account and in seconds you'll be experiencing the best in CFA exam preparation.
Basic Question 6 of 6
Consider the following events:
S2: Fed increases interest rates in the first quarter of 2012
S3: Fed leaves interest rates unchanged in the first quarter of 2012
X: Earnings per share for a certain stock
P(S1)=0.3, P(S2)=0.35, P(S3)=0.35, E(X|S1)=3.35, E(X|S2)=3.67, E(X|S3)=3.52
B. $3.52
C. $3.57
S1: Fed decreases interest rates in the first quarter of 2012
S2: Fed increases interest rates in the first quarter of 2012
S3: Fed leaves interest rates unchanged in the first quarter of 2012
X: Earnings per share for a certain stock
We have the following information:
P(S1)=0.3, P(S2)=0.35, P(S3)=0.35, E(X|S1)=3.35, E(X|S2)=3.67, E(X|S3)=3.52
What is the unconditional expected value of the EPS?
A. $3.51
B. $3.52
C. $3.57
User Contributed Comments 0
You need to log in first to add your comment.
I passed! I did not get a chance to tell you before the exam - but your site was excellent. I will definitely take it next year for Level II.
Tamara Schultz
Learning Outcome Statements
calculate expected values, variances, and standard deviations and demonstrate their application to investment problems
CFA® 2025 Level I Curriculum, Volume 1, Module 4.