CMA Exam Quiz 14

In some fields it is more common to refer to the normal distribution as which of the following?

I. the Heisenberg distribution
II. the Freudor distribution
III. the Gaussian distribution
IV. the weight distribution

Normal distributions can generate numbers from negative infinity to positive infinity. For a particular normal distribution, the most extreme values might be considered to be?
I. Extremely unlikely but can still occur
II. Extremely likely
III. Plausible
IV. Extremely unlikely

Normally distributed log returns are widely used in financial simulations, and form the basis of a number of financial models, including which of the following?
I. The equity pricing model.
II. The Project-based pricing model
III. The Value-based pricing model.
IV. The Black-Scholes option pricing model.

Because the normal distribution is so widely used, most practitioners are expected to have at least a rough idea of how much of the distribution falls within which of the following?
I. one standard deviation
II. two standard deviations
III. three standard deviations
IV five standard deviations

In risk management it is also useful to know how many standard deviations are needed to encompass how many percent of outcomes?
I. 75 percent of outcomes.
II. 95 percent of outcomes.
III. 99 percent of outcomes.
IV. 100 percent of outcomes.

While some problems in risk management have explicit analytic solutions, many problems have no exact mathematical solution. In these cases, we can often approximate a solution by creating which of the following?
I. A Monte Carlo simulation.
II. A probability simulation.
III. A Waldo simulation.
IV. A Carana simulation.

What is the present value of an offer of $14,000 one year from now if the opportunity cost of capital (discount rate) is 11% per year simple interest?

I. $12,613.3
II. $12,689.1
III. $15,877.5
IV. $13,758.1

If you invested $15,000 at one point in time and received back $30,000 five years later, what annual interest (or growth) rate (compounded annually) would you have obtained?
I. 15%
II. 13%
III. 14.87%
IV. 14.59%

A time series is an equation or set of equations describing which of the following?
I. How variables evolves over time.
II. How a random variable evolves over time.
III. How certain assumptions evolves over time.
IV. How equation variables evolves over time.

the most popular statistic for describing linear regressions is
I. The coefficient of determination
II. The R-squared
III. The T-Squared
IV. The casio regression