- CFA Exams
- CFA Level I Exam
- Topic 1. Quantitative Methods
- Learning Module 4. Common Probability Distributions
- Subject 5. Binomial Distribution
CFA Practice Question
Research shows that 72% of consumers have heard of MBI computers. A survey of 500 randomly selected consumers is to be conducted. What is the mean and standard deviation for the number of consumers that have heard of MBI computers?
B. 360; 100.80
C. 144; 100.80
A. 360; 10.04
B. 360; 100.80
C. 144; 100.80
Correct Answer: A
variance = 0.72 x (1 - 0.72) x 500 = 100.8
standard deviation = 100.81/2 = 10.04
mean = 0.72 x 500 = 360
variance = 0.72 x (1 - 0.72) x 500 = 100.8
standard deviation = 100.81/2 = 10.04
User Contributed Comments 3
| User | Comment |
|---|---|
| TammTamm | A seems like the only logical answer without doing the calculations. I wish all Quant was like this. |
| DonAnd | I keep making the careless mistake of not taking the square root to get the s.d. woe'tis me. so naturally i selected B. ahhhh!!!! |
| endurance | key here is determine the difference between Bernoulli and binomial to get variance/stddev correct. Either the consumer know or don't know about MBI computers -> binomial -> variance = np(1-p) -> stddev = (np(1-p))^0,5 |