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MDFM Final Review
MDFM Final Review
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1
If an annuity is paid at the beginning of the period, what type is it?
Ordinary
Varied
Differed
Due
2
What is the key word of when to use multiplication law?
GIVEN
AND
REPLACEMENT
OR
3
Simplify the following: \int_{ }^{ }\frac{3}{16}\sqrt{x}
\int_{ }^{ }x^{\frac{3}{16}}
\frac{3}{16}\int_{ }^{ }x^{\frac{1}{2}}
\frac{3}{16}\int_{ }^{ }\sqrt{x}
\int_{ }^{ }x^{\frac{1}{2}\cdot\frac{3}{16}}
4
What is the algebraic formula conversion to solve for rate in compound interest? r=
n\cdot\left(\frac{FV}{PV}^{\frac{1}{n\cdot t}}-1\right)
\left(\frac{FV}{PV}-1\right)^{\frac{1}{n\cdot t}}
\left(\frac{FV}{PV}^{\frac{1}{n\cdot t}}-1\right)
n\cdot\left(\frac{FV}{PV}-1\right)^{\frac{1}{n\cdot t}}
5
Do I need to create a probability table to calculate Expected Value, Variance, and Standard Deviation?
No, it's optional. I can just calculate straight into my procedure paper.
Yes, it's mandatory. This is how we learned it in class.
6
What is a complementary event and how is it algebraically represented?
It's the other part of a probability. P'\left(A\right)=1-P\left(A\right)
It's the other part of a probability. P'\left(A\right)=1+P\left(A\right)
7
A finance problem tells the me original loan amount with rate specificied and asks for the interest amount. Is the loan:
Future Value because it's the original present loan with a known rate
Present Value because it's the future amount with interest added
Present Value because it's the original present loan with a known rate
Future Value because it's the future amount with interest added
8
When dealing with Future and Present Value, the time tense used in sentences or key words can give a clue to either, so:
"After X years, I paid $$$ amount that I borrowed." The $$$ is PV
"After X years, I paid $$$ amount that I borrowed." The $$$ is FV
9
Binomial Distribution has which of the following characteristics:
One outcome; success
Two outcomes; success or failure
Three outcomes; success, failure, or neither
One outcome; failure
10
What is the key word of when to use conditional law?
GIVEN
AND
OR
REPLACEMENT
11
In a multiplication law problem, colored marbles are pulled at the same time. If I want to analyze how each pull goes:
An independent event and each pull would not affect the denominator total
It's independent event and each pull would decrease the denominator total
It's a dependent event and each pull would not affect the denominator total
It's a dependent event and each pull would decrease the denominator total
12
What is the definition of a discrete random variable?
Uncountable variables with an infinite set of intervals
Countable variables with an infinite set of intervals
Uncountable variables with a finite set of intervals
Countable variables with a finite set of intervals
13
From a Venn Diagram, what can you get from all three inside values?
The Addition Law: Adding A and B, and substracting the shared
The Multiplication Law: Adding A and B, and substracting the shared
14
How do you calculate the first interest amount of a mortage problem when given the loan amount, n periods, and rate?
I need an amortization table and the payments first
it's the starting loan times the rate in monthly units converted = SB*r
15
What is the key word of when to use addition law?
REPLACEMENT
GIVEN
OR
AND
16
In amortizations and annuities, mortages operate in which frequency and compounding?
Daily
Monthly
Quarterly
Weekly
17
A Compound interest problem where t is 10 months, rate is 2% annually compounded monthly, what conversions are needed
Just months because it's an annuity problem
Just 10 months to years = 10/12 because it's a compound interest problem
Both rate and time because it's an annuity problem
Just rate divided by 12 because it's a compound interest problem
18
Without knowing if there's replacement or if it's without replacement, what are the missing values in the table?
1/5 for x=1 and 2/5 for x=2 because the table adds up to 1
2/5 for x=1 and 1/5 for x=2 because the table adds up to 1
1/5 for x=1 and 1/5 for x=2 because the table adds up to 1
2/5 for x=1 and 2/5 for x=2 because the table adds up to 1
19
What is the first step in setting up the procedure for a Continuous Random Variable (Integral) problem?
Establishing the equation and simplifying where possible
Establishing the limits and the simplification where possible
Establishing the limits, equation, and simplifying where possible
Establishing the limits and equation
20
A finance problem gives the me original loan with the rate specificied and asks for the interest amount. What do I do?
I= PV* r *t
I= FV* r *t
I=FV-PV
FV=PV(1+r *t)
21
From a Venn Diagram, what does the middle section represent?
The shared "OR": P\left(A∪B\right)
The shared "AND": P\left(A∪B\right)
The shared "AND": P\left(A∩B\right)
The shared "OR": P\left(A∩B\right)
22
I want to triple an investment in the future. How do I calculate this value?
I add to my present investment 3 USD and apply a finance formula
I multiply my present investment times 3 and apply a finance formula
I multiply my present investment times 2 and apply a finance formula
I elevate my present investment by a power of 3 and apply a finance formula
23
An investment annuity is paid at the beginning of the period where I want to know the value after X years. The Formula:
Annuities Due. The Present Value Formula
Ordinary Annuity. The Present Value Formula
Ordinary Annuity. The Future Value Formula
Annuities Due. The Future Value formula
24
Simplify the following: \int_{ }^{ }0.5\left(10x-4\right)
\int_{ }^{ }5x+\int_{ }^{ }2
\int_{ }^{ }5x-4
\int_{ }^{ }5x-\int_{ }^{ }2
\int_{ }^{ }5x-2
25
What is the definition of a continuous random variable?
Countable variables with an infinite set of intervals
Uncountable variables with a finite set of intervals
Uncountable variables with an infinite set of intervals
Countable variables with a finite set of intervals
26
What is the best simple interest equation to solve for rate or time when I am given the interest amount?
I=PV*r*t because I don't have to deal with the parenthesis.
FV=PV(1+r*t) because it easier to to deal with the parenthesis.
27
FV and PV are the variables for Simple Interest and Compound Interest. Do these variables represent the same as A and P?
True
False
28
What is the mathematical impact of having NOT having replacement?
Your total probability (your denominator) will stay the same each attempt
Your total probability (your denominator) will be less each attempt
29
What is the approximate method for calculating normal distribution?
Continuous Random Variable
Discrete Random Variable
The empirical rule: 68-95-99.7 rule
Z-Score and Z-Probability
30
What variables do I need to change in the compound interest formula and to what?
i=r
i = r*n
i = r^n
i = r/n
31
If a question mentions ordinary interest or ordinary methods, how many days are there
365
360
32
In a Standard deck of cards, what is the total amount per suit? Suits are hearts, diamonds, cloves, and spades.
13
26
52
54
33
Also, what variables do I need to add in the compound interest formula and how?
I multiply r in the exponent part to get n * r.
I multiply t in the exponent part to get n*t.
I divide t in the exponent part to get n/t.
I divide r in the exponent part to get n / r.
34
What is the exact method for calculating normal distribution?
Z-Score and Z-Probability
Continuous Random Variable
The empirical rule: 68-95-99.7 rule
Discrete Random Variable
35
To what probability do distribution probability tables add up to?
Depends on the intervals
Depends on the X
0
1
36
From a Venn Diagram, what is useful about the addition law?
It gives the number of elements unique to A or B
Its not equal to 1 which can't give any probability
37
Why is it important to subtract the non-mutually exclusive events when using addition law:
To not multiply the shared probability in the result
To not to add the shared probability in the result
To add the shared probability in the result
To multiply the shared probability in the result
38
σ and μ are the greek letters for what in word problems:
Standard Deviation and Mean or Average
Variance and Expected Value
Standard Deviation and Viscosity
Variance and Mean or Average
39
Can a combination or permutation problem involve addition or multiplication laws?
Yes, through key words such as "AND" or "OR".
No, because counting techniques are independent of probabilities.
40
Simplify the following: \int_{ }^{ }\frac{x^5}{25}
\frac{1}{25}\int_{ }^{ }x^5\cdot25
\frac{1}{25}\int_{ }^{ }\frac{x^5}{25}
\int_{ }^{ }x^{5\cdot\frac{1}{25}}
\frac{1}{25}\int_{ }^{ }x^5
41
In the annuities formulas, R and i represent the same as P and r?
No, you need to convert them just like Compound Interest.
Yes, they represent the same as Payment and Rate.
42
PV means Payment Value
True
False
43
In a Standard deck of cards, what is the total amount?
26
54
13
52
44
How you know when to use combinations versus permuations in your calculator for a problem?
If the order matters its permutation
If the order does not matter it can be either
If the order matters its combination
If the order does not matter its permutation
45
From a Venn Diagram, what do values outside the diagram represent?
Numbers that are not A or B but part of the total amount
Numbers that are not A or B but not part of the total amount
46
Which important rule do you need to study relating the addition law when you are working two sets of data in a problem?
Non-Mutually Exclusive Events to identify shared probabilities (the A∩B)
Independent and dependent events to understand the multiplication set up
47
If a Z-Score problem is asking for a probability of greater than \left(X\ge?\right), that means in the procedure that:
I Subtract my Z-Score probability from 1 because Z-Tables point tothe left
I Subtract my Z-Score probability from 1 because Z-Tables point tothe right
48
If a question mentions exact interest or exact methods, how many days are there
365
360
49
How are discrete random variable tables initially built?
By defining the Integral limits
By defining the X and the intervals [0,1,2,3,4...]
50
How many odd numbers are there in 1 to 5?
3
4
2
0
51
How do independent and dependent events differ in the multiplication law
They either are events that involve replacement or are without replacement
They are either events that are exclusive or non-mutually exclusive
52
An investment annuity is paid at the beginning of the period where I want to know the value after X years. The Formula:
Ordinary Annuity. The Future Value Formula
Annuities Due. The Present Value Formula
Ordinary Annuity. The Present Value Formula
Annuities Due. The Future Value formula
53
After reviewing the guide, do I need to convert variables in the compound interest formula to get the class version form
False
True
54
In a Binomial Problem, I already calculated P\left(X\ge5\right) when n= 9. I am now asked for P\left(X\le4\right):
I should apply the binomial formula for 0,1,2,3,4, add them, and waste time
I should substract myprevious probability from 1 because of binomial theory
55
What is the algebraic formula conversion to solve for time in compound interest? t=
n\frac{\log10\left(\frac{FV}{PV}\right)}{\log10\left(1+\frac{r}{n}\right)}
\frac{\log10\left(\frac{FV}{PV}\right)}{\log10\left(1+\frac{r}{n}\right)}
r\frac{\log10\left(\frac{FV}{PV}\right)}{\log10\left(1+\frac{r}{n}\right)}
\frac{\log10\left(\frac{FV}{PV}\right)}{\log10\left(1+\frac{n}{r}\right)}
56
If an annuity is paid at the end of the period, what type is it?
Due
Differed
Ordinary
Varied
57
In a Standard deck of cards, what is the total amount per color? Colors are red or blacks
26
13
52
54
58
If a car costs 500,000 USD but I need down payment of 10%. What is the amount that is in a payment plan afterwards?
500,000
450,000
950,000
550,000
59
In a Venn Diagram problem, how do I solve for the total number of elements (the denominator) to then find a probability?
Subtract the outside numbers from the unique total element in A or B
Adding the unique elements A or B in the diagram and the outside ones
