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Reading 7: Statistical Concepts and Market Returns - LOS e

Q1. What are the median and the third quintile of the following data points, respectively?

9.2%, 10.1%, 11.5%, 11.9%, 12.2%, 12.8%, 13.1%, 13.6%, 13.9%, 14.2%, 14.8%, 14.9%, 15.4%

A)   13.1%; 13.7%.

B)   13.1%; 13.6%.

C)   12.8%; 13.6%.

Q2. What is the seventh decile of the following data points?

81     84    91    97    102           108           110           112           115           121

128     135           138           141           142           147           153           155           159           162

A)   141.0.

B)   142.0.

C)   141.7.

Q3. What does it mean to say that an observation falls in the sixty-fifth percentile?

A)   65% of all the observations are below that data point.

B)   35% of all the observations are above that data point.

C)   65% of all the observations are above that data point.

Q4. Consider the following set of stock returns: 12%, 23%, 27%, 10%, 7%, 20%,15%. The third quartile is:

A)   23%.

B)   21.5%.

C)   20.0%.

Q5. One year ago, an investor made five separate investments with the invested amounts and returns shown below. What is the arithmetic and geometric mean return on all of the investor’s investments respectively?

Investment       Invested Amount      Return (%)

A                      10,000             12

B                   10,000            14

C                   10,000             9

D                 20,000             13

E                   20,000             7

A)   11.64; 10.97.

B)   11.00; 10.78.

C)   11.00; 10.97.

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