Quantitative Finance

For any continuous random variable, the probability that the random variable takes on exactly a specific value is

• 1.00

• 0.50

• any value between 0 to 1.

• 0

The area to the left of the mean in any normal distribution is equal to:

• 0.5

• the median

• the standard deviation

• 1.0

When the population variance is known, the margin of error is computed by using the

• standard normal distribution

• t distribution

• mean of the sample

• mean of the population

In hypothesis testing, the tentative assumption about the population parameter is

• ) the alternative hypothesis

• the null hypothesis

• either the null or the alternative.

• neither the null nor the alternative

From a population that is normally distributed, a sample of 50 elements is selected and the standard deviation of the sample is computed. For the interval estimation of μ, the proper distribution to use is the

• A) normal distribution.

           

•             B) t distribution with 51 degrees of freedom.

             

•             C) t distribution with 50 degrees of freedom.

            

•             D) t distribution with 49 degrees of freedom.

   

In regression analysis, the variable that is being predicted is the

• A) dependent variable.

          

•      B) independent variable.

          

•     C) intercept variable.

            

•      D) error variable.

. The Poisson probability distribution is a ______ probability distribution.

• a.         continuous

            

•             b.         discrete

             

•             c. uniform

•             d.         normal

Which of the following is not a characteristic of an experiment where the binomial probability distribution is applicable?

• a.         The experiment has a sequence of n identical trials.

        

•             b.         Exactly two outcomes are possible on each trial.

      

•             c.         The trials are dependent.

           

•             d.   The probabilities of the outcomes do not change from one trial to another.

. A variable that can take on a finite and countable number of values is a ________ variable.

• a.         qualitative

• b.         discrete

• c.         continuous

• d.         Poisson

. In a standard normal distribution, the

• a.         mean and the standard deviation are both 1.

       

•             b.         mean is 0 and the standard deviation is 1.

             

•             c.         mean is 1 and the standard deviation is 0.

          

•             d.         mean and the standard deviation can have any value.