Quantitative Methods

Question 1

What is up-move factor?

Answer 1

One plus the percentage increase when variable goes up.

Question 2

What is down-move factor?

Answer 2

One divided by the move-up factor.

Question 3

Why stratified random sampling is used?

Answer 3

It is used to preserve characteristics of an underlying data set.

Question 4

How standard deviation can be calculated?

Answer 4

1. Compute Expected Value by calculating weighted average.
2. Compute Variance by summing weight*gap between the value and weighted average squared.
3. Compute square root of variance.

Question 5

What is down grade risk?

Answer 5

Risk of getting credit rate down graded.

Question 6

What is default risk?

Answer 6

Risk of the other party failing to make contractually promised payment.

Question 7

What is shortfall risk?

Answer 7

Risk of portfolio value falling below some minimum level at a future date.

Question 8

What is Type I error?

Answer 8

Error of rejecting null hypothesis when it is true. (擬陽性）

Question 9

What is Type II error?

Answer 9

Error of not rejecting null hypothesis when it is false. （偽陰性）

Question 10

What is significance level?

Answer 10

Probability of Type I error.

Question 11

What is confidence level?

Answer 11

One minus significant level.

Question 12

What is the Power of Test?

Answer 12

One minus Type II error.

Question 13

What are the odds?

Answer 13

Probability that the event occurs divided by the probability that the event does not occur.

Question 14

Dividing covariance between returns of two assets by the individual standard deviations of returns of two assets yields…

Answer 14

Correlation coefficient.

Question 15

What is the sampling error?

Answer 15

The difference between a sample statistics and the corresponding population parameter.

Question 16

How to compute equivalent annual rate of continuously compounded rate?

Answer 16

Press 1+continuously compounded late and LN button of BA II.

Question 17

What is standard error of the sample mean？

Answer 17

Standard deviation of sample mean.

Question 18

How standard deviation of sample mean can be estimated ?

Answer 18

Divide population mean by Root n.

Question 19

Classify real personal income, unemployment rate, building permits to coincident, lagging and leading indicator.

Answer 19

Coincident indicator- personal income, lagging- unemployment and leading - building permits.

Question 20

Name some of the lags concerning fiscal policy.

Answer 20

Recognition lag, action lag, and impact lag.

Question 21

Name characteristics of different market types.

Answer 21

Differentiated products for monopolistic competition, interdependence for oligopoly, horizontal demand curve for perfect competition.

Question 22

What is the Fisher effect?

Answer 22

nominal interest rate equals the sum of real interest rate and expected inflation rate.

Question 23

How the land is reported in USGAAP?

Answer 23

By historical cost.