- CFA Exams
- CFA Exam: Level I 2021
- Study Session 3. Quantitative Methods (2)
- Reading 9. Common Probability Distributions
- Subject 1. Basic Definitions

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**CFA Practice Question**

For the probability distribution shown below ______.

B. The expected value of x is 2.2

C. P(x > 2) = 40%

A. P(x < 5) = 95%

B. The expected value of x is 2.2

C. P(x > 2) = 40%

Correct Answer: B

P(x > 2) = 1 - P(x < 2) = 1 - [p(0)+p(1)+p(2)] = 1 - [0.1 + 0.3 + 0.25] = 0.35 = 35%

Expected value = summation of x times p(x). Using the calculator, we get 2.2.

Reading the chart, we get: P(x < 5) = 1 - P(x > 5) = 1 - [p(5) + p(6)] = 1 - [0.05 + 0.05]= 90%.

P(x > 2) = 1 - P(x < 2) = 1 - [p(0)+p(1)+p(2)] = 1 - [0.1 + 0.3 + 0.25] = 0.35 = 35%

Expected value = summation of x times p(x). Using the calculator, we get 2.2.

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**User Contributed Comments**
11

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

Janey |
Its easier if you find this answer using the weighted mean formula on your calculator |

bahodir |
How to do it using BA II Plus pro? |

StanleyMo |
hello Bahodir, enter [2nd] then [data], then key in the value, then enter [2nd] and [stat] , press up arrow key, done. |

SuperM |
Please go into more detail with the using your calculator? |

ravdo |
Please explain on HP12C as well. |

JKiro |
using HP12c: [f][REG][f][REG] <---- to clear the register 0.1[ENTER]0[*][+] <--- just showing the mechanics 0.3[ENTER]1[*][+] <--- begin here to save time 0.25[ENTER]2[*][+] . . . 0.05[ENTER]6[*][+] ---> 2.2 note that the register remain UNCLEARED after each step |

kmmcclanahan |
Or you can simply add up the probability that x>2 to be 35% and add up the probability that x<5 is 90% and just pick the only possible answer left. No need for a calculator on this. |

cfaeater |
Does anyone know the detail on how to enter into the BAII? |

Jurrens |
Using a HP12c is much easier, just use the sigma+ feature (pg 99 in the hp12c manual) |

rsanfo |
For this question, calculator is not needed since A and C are false, but ... BA II Plus ========== 2ND, DATA (enter the data worksheet) 2ND, CLR WORK (clear the data worksheet) Enter the values: X01 = 1 Y01 = 0.3 etc. 2ND, STAT 2ND, SET (until LIN appears) arrow up until <sum of x times y> appears Answer is 2.2 |

birdperson |
good answer @rsanfo |