Statistical Concepts and Market Returns

16 questions

1. 1. What of the following statements is the most accurate distinction between a population parameter and a sample statistic?
   A sample statistic will change each time you try to measure it, but a population parameter will remain fixed.A population parameter is only based on conceptual measurements, but a sample statistic is based on a combination of real and conceptual measurements. The true value of a sample statistic can never be known but the true value of a population parameter can be known.
2. 2. A list of 5 mutual funds provided the following yearly returns: 70%, 64%, 80%, 74%, and 92%. What is the median for this list?
   92%74%64%
3. 3. An investor has a portfolio of 5 stocks. The portfolio has an arithmetic mean of 10%, and harmonic mean of 6%. What can be said about the geometric mean of the portfolio?
   The Geometric mean < 6%The Geometric mean is between 6% and 10%The Geometric mean > 10%
4. 4. Which of the following would indicate that a dataset is not bell-shaped?
   The range is equal to 5 standard deviations. The mean is much smaller than the median. There are no outliers.
5. 5. We have the following data about a portfolio:

   

   Bonds have a correlation of 40% with equities and cash has a correlation of only 5% with equities. Calculate the portfolio returns.

   11.3%11.8%12.5%
6. 6. We have the following information about three portfolios.

   

   Assuming a risk-free rate of 5%, which of these portfolios has the highest Sharpe ratio?

   Portfolio APortfolio BPortfolio C
7. 7. A financial analyst selects a sample of 100 mutual funds from over 8000 available mutual funds and calculates the average returns from these 100 mutual funds. It is 13.5%. Based on this sample, he then estimates the mean returns of all the mutual funds to be 13.5%. With respect to this, which of the following statements is most accurate?
   The analyst used inferential statistics to calculate the mean returns of the sample and descriptive statistics to estimate the mean returns of all mutual funds.The analyst used descriptive statistics to calculate the mean returns of the sample and inferential statistics to estimate the mean returns of all mutual funds.The analyst used descriptive statistics to calculate the mean returns of sample as well as the population of all mutual funds.
8. 8. A personal finance magazine has published a ranking of top 10 stocks based on their P/E ratio. The data is most likely presented using:
   Nominal ScaleOrdinal ScaleRatio Scale
9. 9. Which of the following is an example of data presented using ratio scale?
   A company asking its customers to rate their services on a scale of 1 to 10.The amount of money a group of people have in their pocket right now.Stocks classified as small-cap, mid-cap, and large-cap.
10. 10. We have the following returns from a stock over the past 10 years.

    

    Calculate the arithmetic mean return for the stock.

    6.6%8.5%12%
11. 11. We have the following returns from a stock over the past 10 years.

    

    What are the median returns for the stock?

    6.6%8.5%9%
12. 12. We have the following returns from a stock over the past 10 years.

    

    What is the mode return for the stock?

    6.6%8.5%12%
13. 13. We have the following returns from a stock over the past 10 years.

    

    What is the range for returns of the stock?

    12%20%28%
14. 14. We have the following returns from a stock over the past 10 years.

    

    Assuming the data set is a sample, calculate the sample standard deviation.

    0.696%7.91%8.34%
15. 15. Assuming a skewed distribution, calculate the minimum percentage of the observations that will lie between ±5 standard deviations of the mean based on Chebyshev's Inequality?
    75%84%96%
16. 16. The kurtosis of a Leptokurtic distribution will be:
    Equal to 3Greater than 3Less than 3