- CFA Exams
- CFA Exam: Level I 2021
- Study Session 3. Quantitative Methods (2)
- Reading 9. Common Probability Distributions
- Subject 5. The Binomial Distribution

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**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 = 100.8

mean = 0.72 x 500 = 360

variance = 0.72 x (1 - 0.72) x 500 = 100.8

standard deviation = 100.8

^{1/2}= 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 |