Question 6     (1 mark)

Which of the following statement is incorrect regarding a standardised normal distribution? A   mean (µ) is equal to 0 and standard deviation (σ) is equal to 1.

B  68% of the data around the mean is about one standard deviation of the data. C   mean (µ) is equal to 1 and standard deviation (σ) is equal to 0.

D   Total probability under the curve is 1.

Question 7   (1 mark)

If event A and event B cannot occur simultaneously, then events A and B are said to be:

A     statistically independent

B      mutually exclusive

C      perfectly correlated

D     collectively exhaustive

Question 8   (1 mark)

The annual return of a hedge fund measured in percentage terms is an example of what kind of variable?

A     indiscrete

B      continuous

C      discrete

D     uniform

Question 9   (1 mark)

Consider the following two statements regarding the properties of a probability function of a discrete random variable:

Statement 1: 0 ≤ p (x )≤1 , because probability is a number between (-1) and (+1).

Statement 2: The sum of the probabilities p(x) over all values of X equals 1.

Which of the statement(s) is correct?

A     Both Statement 1 and 2 are correct

B      Both Statement 1 and 2 are incorrect

C      Only Statement 1 is correct

D     Only Statement 2 is correct

Question 10  (1 mark)

In a binomial experiment,

A     the probability of success does not change from trial to trial

B      the probability of success does change from trial to trial

C      can be applied to an infinite number of trials

D     each trial can be depended on other trials.