Question 4 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?

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?

Which condition ensures that P(A | B) = P(A)?

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?