- 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**

For random variable x from a binomial distribution with N = 20 and p = 0.3, the standard deviation is ______ (to nearest 0.01).

B. 4.20

C. 2.05

A. 0.30

B. 4.20

C. 2.05

Correct Answer: C

The standard deviation is sqrt[Np(1 - p)]. Here, N = 20 and p = 0.3. So, the standard deviation is sqrt[(20)(0.3)(1 - 0.3)] = 2.05 (to the nearest 0.01).

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**User Contributed Comments**
3

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

TammTamm |
WOW! I was actually able to work this one out without guessing. Yippee!!!!! |

magicchip |
@TammTamm: you are on the right track! :-) |

DonAnd |
way to go TammTamm! |