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Unformatted text preview: EC 41, UCLA Winter 2009 Name (print)________________________________ Midterm #2  Version A 2/23/09 RE Ch 4, 5, 6.1, 6.2 TA: Name__________________________ & Section Time_____________  The normal table and useful formulas are on the last page of this exam.  Only pens, pencils and erasers may be used, this is a closed book, closed note, exam.  Students may use a calculator, but nothing that can access the internet.  Write noninteger answers to 3 significant digits, e.g., 333, or 3.33 or .0333  This exam consists of 10 True/False (20 points), 10 short answer (30 points) and 5 longer questions (50 points)  Clearly write answers on this exam. No points are awarded for illegible answers.  Be prepared to show a photo ID during the exam (e.g., UCLA ID)  You may leave when finished. Do not disrupt those still taking the exam. I. Circle T for True or F for False (2 points each) 1) T or F The primary benefit of a welldiversified portfolio is that the standard deviation of its return will typically be less than that of a lessdiversified portfolio. 2) T or F If the random variable Z = X+Y, then standard deviation of Z is the sum of the standard deviations of X and Y ( Z = X + Y ) 3) T or F If the random variable Z = X+Y, then the variance of Z is the sum of the variances of X and Y ( Z 2 = X 2 + Y 2 ) 4) T or F If two events are disjoint, probability of A or B = probability of A plus B = P(A) + P(B) 5) T or F A higher pvalue will provide better evidence that the null hypothesis is false. 6) T or F Benfords Law (used to check accuracy of financial documents) implies that the probability of the first digit of numbers in financial documents is equally likely to be any integer from 1 to 9. 7) T or F If two assets have correlation = 1, any portfolio with of these two assets will have standard deviation = 0 8) T or F A confidence interval gets wider (larger) as the number of observations in a sample is increased. 9) T or F For a particular calculated positive sample mean X , the probability of rejecting a null hypothesis H : =0, is smaller against a twosided alternate H a : 0; than against a onesided alternate H a : >0....
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This note was uploaded on 12/06/2009 for the course ECON 41 taught by Professor Guggenberger during the Spring '07 term at UCLA.
 Spring '07
 Guggenberger

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