CFA Practice Question

There are 410 practice questions for this study session.

CFA Practice Question

The figures below describe the total return rates (in percentages) for the past three years for 15 top-performing utilities mutual funds.

Biggest return: 15.1
Smallest return: 3.1
Median return: 9.5

What interval length should be used, if one is desired, to construct a frequency distribution with four equally spaced intervals?
A. 4
B. 3.75
C. 3
Explanation: 1. Determine how many classes we need. Since 24 > 15, we need 4 classes.
2. Interval: (15.1 - 3.1)/4 = 3

User Contributed Comments 7

User Comment
wollogo Where do they get the 2^4 from? It says in the question that their are "four equally spaced intervals"!
chamad step 1 is just an extra explanation for more complicated cases
haosheng 4 equally interval:
0,3,6,9,12 make sense?

I chose A. Hope anyone could explain this a bit
StanleyMo 3.1 to 15.1 is 12, with 4 same space interval, we pick the length as 3.
Daddykay Wollog, the best way to look at it is to take to calculate the range which is highest value less lowest value (15.1-3.1=12). Now you wanna spread out 12 into four equally spaced distributions which means they must have intervals of 12/4=3
mpapwa22 Thanks Daddykay...tht is the best explanation you get here. Find the range first.
Shaan23 No guys. THere's a rule and it states that the for the smallest value of k where 2^k > 15 select that number for the number of intervals.

The first k value is 4 ---- 16 > 15

Its just memorization
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