Question 30 of 50

Which of the following best describes a set of events that includes all possible outcomes?

If a probability is determined by analyzing past data, it is best classified as an:

If the probability of an event occurring is 0.20, what are the odds against the event occurring?

If the odds for a company beating earnings estimates are stated as 1 to 5, the implied probability of beating estimates is closest to:

Which rule is used to determine the probability that at least one of two events will occur?

Given P(A) = 0.40, P(B) = 0.30, and P(A | B) = 0.50, what is the joint probability P(AB)?

Using the same probabilities from the previous question (P(A) = 0.40, P(B) = 0.30, P(AB) = 0.15), what is the probability of A or B occurring?

Two events A and B are mutually exclusive. If P(A) = 0.20 and P(B) = 0.40, what is P(A or B)?

If two events A and B are independent, which of the following equations must hold true?

Assume the probability of rolling a 4 on a six-sided die is 1/6. What is the probability of rolling three 4s in three consecutive rolls?

An analyst estimates a 60 percent probability the market rises. If the market rises, there is a 70 percent chance a specific stock rises. If the market does not rise, there is a 20 percent chance the stock rises. What is the unconditional probability the stock rises?

Given the following return distribution: 30 percent probability of 10 percent return; 50 percent probability of 12 percent return; 20 percent probability of 15 percent return. What is the expected return?

Using the same distribution (30 percent prob of 10 percent; 50 percent prob of 12 percent; 20 percent prob of 15 percent; expected return 12 percent), what is the variance?

A portfolio consists of 40 percent Asset A and 60 percent Asset B. Asset A has an expected return of 8 percent, and Asset B has an expected return of 14 percent. The portfolio expected return is:

The covariance between returns on Stock A and Stock B is 0.005. The standard deviation of Stock A is 0.10 and the standard deviation of Stock B is 0.20. The correlation coefficient is:

Which of the following statements about covariance is correct?

A portfolio has 60 percent invested in Asset 1 and 40 percent in Asset 2. Asset 1 variance is 0.04, Asset 2 variance is 0.09, and the covariance is 0.03. What is the portfolio variance?

Consider a portfolio with two assets where the correlation coefficient between their returns is +1.0. The standard deviation of the portfolio will be:

In a 3-asset portfolio, how many unique covariance terms (off-diagonal) are needed to calculate the portfolio variance?

Prior probabilities are updated to posterior probabilities using:

Assume P(Information | Event) = 0.75, P(Information) = 0.40, and P(Event) = 0.20. What is P(Event | Information)?

An analyst wants to select 3 stocks for a 'buy' list from a universe of 10 stocks. The order of selection does not matter. The number of possible combinations is:

There are 5 runners in a race. How many ways can the first, second, and third place trophies be awarded?

A manager must label 8 stocks into three categories: 4 'Hold', 3 'Buy', and 1 'Sell'. How many ways can these labels be assigned?

Calculate 5 factorial (5!).

Which of the following is a conditional probability?

If P(A) = 0.5 and P(B) = 0.5, and A and B are independent, what is P(A or B)?

Given: P(A) = 0.60, P(B | A) = 0.70, P(B | Not A) = 0.20. What is the updated probability P(A | B)?

A probability distribution has outcomes 1, 2, and 3 with probabilities 0.2, 0.5, and 0.3 respectively. What is the standard deviation?

Given Cov(A,B) = 0.004, Var(A) = 0.04, Var(B) = 0.01. The correlation coefficient is:

If two assets have a correlation of -1.0, the portfolio standard deviation can potentially be reduced to:

In a decision tree, the probability of reaching a specific terminal node is calculated by:

A manager assigns 3 analysts to cover 3 different industries. If the assignment of specific analysts to specific industries matters, how many assignment options are there?

Given P(A) = 0.5, P(B) = 0.4. If A and B are mutually exclusive, P(A or B) is:

The sum of probabilities of a set of mutually exclusive and exhaustive events must equal:

A scatter plot of two variables shows a pattern sloping from lower left to upper right. This indicates:

Calculate the number of ways to choose a committee of 2 people from a group of 5.

A subjective probability is based on:

If a portfolio contains 60 percent stock and 40 percent bonds, and the covariance is 0.001, what is the contribution of the covariance term to the portfolio variance?

The expected value of a roll of a fair six-sided die is:

Which probability rule is used to update beliefs when new information arrives?

If Event A is 'Rain' and Event B is 'No Rain', these events are best described as:

What is the correlation of a risk-free asset with a risky asset?

If P(A) = 0.4 and P(B) = 0.3, what is the maximum possible value for P(AB)?

Using 10 items, calculating the number of ways to create 5 pairs would involve:

If P(A) = 0.5, P(B) = 0.2, and P(A or B) = 0.7, events A and B are:

An event has a probability of 0.125. The odds against this event are:

What is the variance of a risk-free asset?

Which tool illustrates the calculation of unconditional probabilities using conditional probabilities for a sequence of events?