1) How much money would we need to pay off a $2,000 loan at 8% interest, 4 years from now?
A. $3,220
B. $2,721
C. $1,978
D. $2,632
2) When interest is compounded, the total time period is subdivided into several interest periods, for example 1 year, 3 months, 1 month. How does compound interest affect the future value of an investment?
A. Decreases
B. Increases
C. Stays the same
D. Not enough information
3) When the interest rate is positive, what happens to the value of money as we move from the future to the present?
A. Decreases
B. Increases
C. Stays the same
D. Not enough information
4) What is class frequency?
A. Always contains at least 5 observations
B. The number of observations in each class
C. The difference between consecutive lower class limits
D. Usually a multiple of the lower limit of the first class
5) How is the class midpoint calculated?
A. Count the number of observations in the class.
B. Divide the class interval in half and add the result to the lower limit.
C. Find the difference between consecutive lower limits.
D. Divide the class frequency by the number of observations.
6) What does the horizontal axis of a line chart represent?
A. Variable quantity
B. Dollars
C. Time
D. Percent
7) What is a disadvantage of using range as a measure of dispersion?
A. Range is too broad.
B. Range can be distorted by a large mean.
C. Range is not in the same units as the original data.
D. Range is based on only two observations.
8) Which measures of central tendency are not affected by extremely low or extremely high values?
A. Mode and median
B. Mean and median
C. Mean and mode
D. Only the mean
9) For which measure of central tendency will the sum of the deviations always be zero?
A. Median
B. Mode
C. Mean
D. Mode and Median
10) Which of the following is a characteristic of a normal distribution?
A. Can be either positively or negatively skewed
B. Positively skewed
C. Symmetrical
D. Has a total z-score of 1000
11) What is the proportion of the total area under the normal curve within plus or minus 2 standard deviations?
A. 95%
B. 68%
C. 99.7%
D. 100%
12) Which of the following is true regarding the normal distribution?
A. It is not always symmetrical
B. The total area under the curve is greater than 1
C. It can have more than one peak
D. Mean, median and mode are all equal