- CFA Exams
- CFA Level I Exam
- Study Session 2. Quantitative Methods (1)
- Reading 7. Statistical Concepts and Market Returns
- Subject 3. Frequency Distributions

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**CFA Practice Question**

The following table gives a stock price, dividend, and percentage return for 10 months.

If one were to construct a frequency histogram for the stock prices using 3 classes, what percentage of stocks would fall in the second stock price interval?

A. 20%

B. 30%

C. 40%

**Explanation:**Using 3 intervals, the second interval would be stock prices from $70.70 to $73.5; there are 3, so the relative frequency is 30%.

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**User Contributed Comments**
6

User |
Comment |
---|---|

RichWang |
Width of interval = (76.3 - 69.5) / 3 = 2.27 Second interval starts from 69.5 + 2.27 = 71.77 Second interval ends at 71.77 + 2.27 = 74.04 There are 4 prices in this interval (72.5, 73.6, 73.7 and 73). So relative frequency is 4 / 10 = 40%. Can anyone help to explain? |

Janey |
RichWang the lowest price is 67.9 NOT 69.5 |

lourens |
I fell into same trap of using 69 .5 |

GinnyB |
Don't forget 67.9. 76.3-67.9 = 8.4 8.4 / 3 = 2.8 Interval one: 67.9 - 70.7 Interval two: 70.8 - 73.5 (3/10) |

cfaeater |
I didn't read the question properly. Schoolboy error. |

Murtadha |
cfaeater, I feel you.. |