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Advanced Wealth Management Course (IIBF) - Paper 3

Part I: Ch 3: Statistical and Mathematical Tools

Q1.

Derivatives are very useful in understanding the behaviour of mathematical expressions when variables change in value.

True
False

Q2.

You have opened a bank deposit of Rs. 100,000 of 8% interest rate. What would be the cumulative value at the end of 3 years?

Rs. 100,001.25
Rs. 102,419.25
Rs. 583,200.00
Rs. 125,971.20

Q3.

What is the compounded return if Rs. 1000 becomes Rs. 4000 in 2 years? (Hint: Use appropriate formula)

73.21%
41.42%
100%
83.21%

Q4.

Calculate the arithmetic mean from the following series of share prices: 10, 12,14,12,15,12,13,20

12
12.5
13.375
12.375

Q5.

The probability of returns of 12%, 15% and 20% on a debt security is 20%, 30% and 50%. What is the expected value of returns?

16.9%
10.8%
1.08%
0.16%

Q6.

A straight line connecting any two points of the curve, if the curve lies entirely above the line, it is a concave curve.

True
False

Q7.

(I) R-square tells what percentage of the returns in the dependent variable can be explained by changes in the independent variable. (II) A straight line connecting any two points of the curve, if the curve lies entirely under the line, it is a convex curve.

Both the statements are correct
Only statement (I) is correct
Only statement (II) is correct
Both the statements are wrong

Q8.

Explain, using a formula, what would be the present value of Rs. 100,000 received in 25 years, assuming the discount rate as 15%?

Rs. 2173.91
Rs. 3478.26
Rs. 2875.00
Rs. 3037.76

Q9.

Explain, using a formula, what would be the present value of Rs. 500received in 2 years, assuming the discount rate as 8%?

Rs. 462.96
Rs. 428.67
Rs. 583.2
Rs. 501.16

Q10.

Calculate the median from the following series of share prices: 10, 13, 20, 15, 12, 13, 16, 13.

13.5
12.5
13
17.5

Q11.

Calculate the mode from the following series of share prices: 15,20, 17, 18, 21, 15, 25, 17,15,21

17
21
20
15

Q12.

When data is symmetrically distributed, such that mean, median and mode are the same, it is called a normal distribution.

True
False

Q13.

(I) A standardized measure is one which is not specific to a situation. (II) The process of finding the derivative is called differentiation.

Both the statements are correct
Only statement (I) is correct
Only statement (II) is correct
Both the statements are wrong

Q14.

You have opened a bank deposit of Rs. 100,000 of 8% interest rate. If the bank were accruing interest every half-year. What would be the cumulative value at the end of 3 years?

Rs. 125,971.20
Rs. 102,419.25
Rs. 126,531.90
Rs. 100,001.25

Q15.

If the tail of a distribution is extended on any side, the distribution is said to be:

Bell curve
Negatively skewed
Normal curve
Skewed

Q16.

Examples of standardized measure are:

Z score
R-square
Both (a) & (b)
Correlation co-efficient
All of the above

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