- CFA Exams
- CFA Exam: Level I 2021
- Study Session 3. Quantitative Methods (2)
- Reading 9. Common Probability Distributions
- Subject 4. The Discrete Uniform Distribution

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**CFA Practice Question**

A broker selected 20 different stocks that he likes equally. He identified these stocks with alphabet letters from A to T. Assume that an experiment consists of randomly selecting one of these stocks and then buying it. What is the probability that the broker buys stock V?

B. 0.01

C. None of the above

A. 0.05

B. 0.01

C. None of the above

Correct Answer: C

There is no stock V; the probability of selecting a nonexistent stock is 0.

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**User Contributed Comments**
20

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

kaliokale |
OMG.. This question...........is killing me |

Kendra |
Ok...it isn't that hard...don't let it kill you. V comes after T; given the situation V would have been the 21st stock...therefore V does not exist since the broker selected 20 |

surob |
Would the correct answer be 1 as far as V (x) is out of limit? |

Janey |
Man!! Need to read the question. It got me :) |

zzhumanov |
What if i don't know the alphabet? |

tabulator |
Then possibly you should learn it first before attempting a CFA. |

o123 |
hahah...this is the best question ever! |

bobert |
If the question was a continuous uniform distribution and the question was what is the probability x <= T the answer would then be 1 because T is the upper limit on the range and anything beyond that encompasses all of the range accordingly. Because this is a discrete distribution, the parameter asks for an impossible value therefore equaling 0. Hope that clears up any confusion. Oh, last thing, if the parameters happened to be P <= X <= V the answer would then be .25 because all of the x values above T are not part of the parameter, simply P, Q, R, S, & T. which is 5 of the 20 or if you like the little formula on the 2nd bullet point of this section. |

madhi |
Surob, F(v)=1 but P(v)=0 |

Murrayman |
If you don't know the alphabet you may eventually mistakenly put "FCA" after your name someday, which may be a violation. |

chamad |
thank you guys...I've really laughed...! We need to relax with such questions and commentary but still we have to be carefull in the exam...this is the goal of such question |

olagbami |
fell for dis. nice one analyst notes |

Shalva |
Nice, nice... :-))))) |

AUAU |
Good Question. CFA exam likes to test. |

DonAnd |
I love it! you are all so comical |

cfaeater |
Very good. Very good. Nice bit of comic relief! |

Kevdharr |
I just got owned by that question. Absolutely owned. |

maryprz14 |
hahaha... I think analystnotes is joking us now! :D |

sshetty2 |
Lol. |

zhefuli |
damn |