- CFA Exams
- CFA Level I Exam
- Study Session 3. Quantitative Methods (2)
- Reading 9. Common Probability Distributions
- Subject 6. The Normal Distribution

###
**CFA Practice Question**

Two normal distributions, X and Y, have means of 10% and 15% respectively. What is the mean of the following linear combination: 2X + 3Y?

A. 62.5%

B. 65%

C. 31.3%

**Explanation:**The linear combination of two normal distributions is also a normal distribution. Its mean = 2 x 10% + 3 x 15% = 65%.

###
**User Contributed Comments**
2

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

enetis |
is this a joke? i spent 5 min trying to figure out if this was a trick question. |

edrei7 |
Multiplications, divisions, additions, and subtractions affect means. But only the first two affect variances. |