1
Question Paper
Quantitative Methods (CFA530): October 2007
•
Answer all questions.
•
Marks are indicated against each question.
1.
Which of the following statements is/are
true
with regard to the extrapolation in financial analysis?
I.
Forecasting future sales, cost and profit.
II.
Longterm capital requirements.
III.
Production of financial statements for financial institutions, banks, etc.
(a)
Only (I) above
(b)
Only (II) above
(c)
Only (III) above
(d)
Both (I) and (III) above
(e)
All (I), (II) and (III) above.
(1 mark)
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Answer
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2.
The sales of a consumer durable are ascertained as follows:
Year
2000 2001 2002 2003 2005
Sales Units(in ’000 s)
9
11
18
23
31
Using linear approximation method of interpolation, find the sales in year 2004.
(a)
24,000 units
(b)
25,225 units
(c)
26,750 units
(d)
27,000 units
(e)
29,500 units.
(1 mark)
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Answer
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3.
At K = 17%, the present value of cash flow of a project is Rs.255.76 and at K = 18%, the present value of cash
flow is Rs.249.19. At what value of K, the present value of cash flow is Rs.250?
(a)
11.35%
(b)
15.67%
(c)
17.88%
(d)
19.01%
(e)
21.54%.
(1 mark)
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Answer
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4.
Which of the following is
false
regarding the number and size of class intervals?
(a)
Every item of data or data point should be included in one and only one class
(b)
Adjacent classes should not have intervals in between
(c)
Classes should not overlap
(d)
Class intervals should be of the same length to the extent possible
(e)
The number of classes may be equal to the square of the number of data points.
(1 mark)
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Answer
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5.
To determine the appropriate width of each class interval in a grouped frequency distribution, we
(a)
Take the square of the number of observations
(b)
Divide the number of desired class intervals by the range of the data
(c)
Take the square root of the number of observations
(d)
Divide the range of the data by the number of desired class intervals
(e)
Divide the range of the data by 2.
(1 mark)
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6.
Which of the following is/are
true
with regard to the negatively skewed distribution?
I .
In negatively skewed distribution curve, the most of the values are concentrated at higher end.
II.
For negatively skewed distribution curve A.M < Median < Mode.
III.
Negatively skewed distribution curve tails off towards the higher end.
(a)
Only (I) above
(b)
Only (III) above
(c)
Both (I) and (II) above
(d)
Both (II) and (III) above
(e)
All (I), (II) and (III) above.
(1 mark)
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Answer
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7.
If
m =
2
x1
0
x5
−+
and n = 7x + 3, then m × n =
(a)
32
7x
32x
9x 15
+
(b)
35x
7x 18
++
+
(c)
7x
73x
65x 15
+
(d)
67x
5x 15
+
(e)
7x
67x
30x 17.
+
(1 mark)
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Answer
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8.
Which of the following measures of dispersion is more sophisticated measure of risk, employed commonly in
finance?
(a)
Range
(b)
Standard deviation
(c)
Mean deviation
(d)
Quartile deviation
(e)
Coefficient of variation.
(1 mark)
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Answer
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9.
According to BienaymeChebyshev rule, at least what percentage of the observations in a distribution of data
will lie within
±
3 standard deviations of the mean?
(a)
25%
(b)
50%
(c)
75%
(d)
89%
(e)
97%.
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 Fall '09
 CFA
 Standard Deviation, Mean

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