Quantitative Finance Questions and Some Solutions

10/11/2019 Quantitative Proﬁciency Test
My courses ▶ Quantitative Pro ciency Test ▶ Take the Test

▶ Quantitative Pro ciency Test
Started on Sunday, 10 November 2019, 3:45 PM

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Completed on Sunday, 10 November 2019, 5:35 PM
Time taken 1 hour 50 mins
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Information
This section of the quiz will test your mathematical pro ciency.
https://masters.wqu.org/mod/quiz/review.php?attempt=157968&cmid=26003 1/23
Question 1
Incorrect
Mark 0 out of 1
Let x 0 ∈ (0, ∞)be the value of x ∈ (0, ∞) that maximizes the function
f : (0, ∞) → ℝ de ned by
f (x) := ln x/x for every x ∈ (0, ∞),
and y 0 := f (x 0 ) be the value of this maximum. Then the product x 0 y 0 is
Select one:
0
1
1/e
Question 2
Incorrect
Mark 0 out of 1
If f : (−π /6, π /6) → ℝ is de ned by

f (x) = 2 x tan(3x) for every x ∈ (−π /6, π /6),
then f ′ (0) is
Select one:
0
2π
3
ln 2
Question 3
Incorrect
Mark 0 out of 1
If f is de ned by f (x) for every x then f is

x ′
: (0, ∞) → ℝ = ∈ (0, ∞), (e/2)
ln(2x)
Select one:
e/2
0
e
1/e
Question 4
Correct
Mark 1 out of 1
The value of the integral

π/2
∫0 cos(x)e
− sin x
dx
is
Select one:
−1
e
cos 1
−1
1 − e

− sin 1
e
Question 5
Correct
Mark 1 out of 1
The value of the integral

∞
∫0
2
−x
xe dx
is
Select one:
∞
1/2 
2
Question 6
Incorrect
Mark 0 out of 1
Let A, B and C be square invertible matrices of the same size. If BT B = I = T

BB (X
T
is the transpose of the matrix X ) and C has no eigenvalue equal to -1, then
(ABT + ABT C)−1

is equal to
Select one:
−1 T −1
A B (I + C)
AB(I + C)
−1 −1
A B(I + C)

−1 −1
(I + C) BA
Question 7
Incorrect
Mark 0 out of 1
Let A, B and C be square invertible matrices of the same size. If C has no eigenvalue
equal to -1, then
(AB + ACB)−1 is equal to
Select one:
−1 −1 −1
(I + C) B A

−1 −1
(I + C) BA
−1 −1 −1
B (I + C) A
−1 −1
A B(I + C)
Question 8
Incorrect
Mark 0 out of 1
Let f : (0, ∞) → (0, ∞) and g : (0, ∞) → ℝ be de ned by

f (x) :=
1
for every x ∈ (0, ∞)
x
and
g(x) := ln x for every x ∈ (0, ∞) .
Consider the following statements:

[i.] f is one-to-one
[ii.] f is onto
[iii.] g is one-to-one
[iv.] g is onto
Which of the statements are true?
Select one:
None of the statements
i and iii
All of the statements
i, ii. and iii. 
Question 9
Correct
Mark 1 out of 1
The solution to the following differential equation

y ′′ + 3y ′ − 4y = 0, y(0) = 5, y ′ (0) = 0
is
Select one:
−4t
y(t) = e
y(t) = 5
t −4t
y(t) = 4e + e

t
y(t) = 4e
Question 10
Incorrect
Mark 0 out of 1
The complex number z can also be written as

i
= 2e 4
Select one:
z = √2
‾ + √2
‾i .
z = √2
‾i .
z = 2 + 2i .

z = √2
‾ .
Question 11
Incorrect
Mark 0 out of 1
The following series ∑ n=1

∞ 3
n!
Select one:
converges to e 3
converges to e − 1

diverges to ∞
converges to e 3 − 1
Question 12
Incorrect
Mark 0 out of 1
The following series ∑ n=1 0.2

∞ n
Select one:
converges to 5/4
diverges to ∞

converges to 1/4
converges to 1
Question 13
Correct
Mark 1 out of 1
An island consists of four kinds of people: Tetas, Jekas, Frekas and Hekas. The
following information is known:All Jekas are Tetas
Some (but not all) Hekas are Jekas
No Frekas are TetasConsider the following statements:
[i.] All Hekas are Tetas
[ii.] Some Hekas are Tetas
[iii.] No Frekas are Jekas
[iv.] No Frekas are Hekas
Which of these statements are necessarily true based only on the information

above?
Select one:
All the statements
Only iii.
None of the statements

ii. and iii. 
Question 14
Correct
Mark 1 out of 1
An island consists of four kinds of people: Tetas, Jekas, Frekas and Hekas. The
following information is known:
Every Heka is either a Teta or a Jeka, but not both

All Frekas are Jekas
No Frekas are Tetas
Consider the following statements:
[i.] No Tetas are Jekas

[ii.] Some Hekas are Frekas
Which of these statements are necessarily true based only on the information
above?
Select one:
Only i
All the statements
None of the statements 
Only ii.
Question 15
Correct
Mark 1 out of 1
Let f be de ned by
2
: ℝ → ℝ
+ 2y − 3xy, for every x, y) .

2 2 2
f ((x, y)) := x ∈ ℝ
The value of fx ((0, 0)) + fy ((0, 0)) + fxy ((0, 0)) is:
Select one:
3
0
Unde ned
-3 
Question 16
Correct
Mark 1 out of 1
Evaluate
1 1
∫
0
∫
x
2
sin(y ) dydx
by changing the order of the integral. The answer is
Select one:
1 − sin 1
1
(1 − cos 1)
2

cannot be determined
cos 1
Question 17
Incorrect
Mark 0 out of 1
Evaluate
∞ ∞
∫0 ∫y 2ye −x
3
dxdy
by changing the order of the integral. The answer is
Select one:
1
1
Question 18
Incorrect
Mark 0 out of 1
Let
I := ∬
D
2 dA ,
where D is the interior of the region bounded by the curves y 2
= x $ and y = x
3
with x ≥ 0 and y ≥ 0 .
The value of I is
Select one:
3/4
2/3 
1/6
1/3
Question 19
Correct
Mark 1 out of 1
For each n = 1, 2, 3, … , de ne
2 3
for every x .
n x
f n (x) := , ∈ ℝ
1+2n2 x 2
Then the functionf de ned by

f (x) := lim fn (x)
n→∞

exists for each x ∈ ℝ and is equal to
Select one:
f (x) = 0
2
f (x) = x
f (x) = x
x
f (x) =
2
Question 20
Incorrect
Mark 0 out of 1
Consider the following partial differential equation (PDE):

2 2

∂ u ∂ u
− = 0
∂x 2 ∂y2
where u = u(x, y) is the unknown function.

De ne the following functions:
and u 3 (x, y)
2 2
2 −(x +y )
u 1 (x, y) := cos(2xy), u 2 (x, y) = sin(x y) = e .
Which of these functions are solutions to the above PDE?
Select one:
None of the functions.
u1 and u 3
Only u 3 .

All the functions.
Information
This section will test your statistical pro ciency.
Question 21
Correct
Mark 1 out of 1
A class has 25 students of which 10 are boys (you may assume that the other 15 are
girls). The class average (mean) height is x̄ metres and the mean height for boys is
x̄ B metres. The mean height for girls x̄ G is
Select one:
25x̄+10x̄B
15
15x̄−10x̄B
10
15x̄−10x̄B
25
25x̄−10x̄B
15
Question 22
Correct
Mark 1 out of 1
The lifetimes of a group of 10 light bulbs are given below:

221, 645, 538, 941, 269, 893, 703, 536, 823, 651.
The standard deviation of the lifetimes is (to two decimal places)
Select one:
241.15 
622.00
58155.11
386884.00
Question 23
Correct
Mark 1 out of 1
Let A, B and C be the following sets:

A :={prime numbers}, B :={positive even numbers}
and
C := {positive integers less than or equal to 10}.
The set D := (A ∪ B) ∩ C is
Select one:
{1,2,3,4,5,6,7,8,9,10}
{2,3,4,5,6,7,8,10} 
{2,3,4,5,6,7,8,9,10}
{1,3,5,7,9,...}
Question 24
Correct
Mark 1 out of 1
In a class of 30 students, there are 17 girls and 13 boys. Five are 'A' students, and
three of these 'A' students are girls. If a student is chosen at random, what is the
probability of choosing a girl or an 'A' student?
Select one:
22/30
19/30 
5/30
17/30
Question 25
Correct
Mark 1 out of 1
A jar contains 4 red balls and 7 blue balls. Two balls are drawn at random from the
jar without replacement. What is the probability that exactly one of the balls drawn
is red?
Select one:
4/11
28/55 
28/121
1/2
Question 26
Correct
Mark 1 out of 1
A bag contains 20 balls: 8 red balls and 12 blue balls. Six of these balls are classi ed
as "heavy", and three of the heavy balls are red. If a ball is chosen at random from the
bag, what is the probability that it is red or heavy?
Select one:
14/30
8/30
11/20 
6/30
Question 27
Correct
Mark 1 out of 1
The random variable X has the following probability density function:

−3x
9xe 0 ≤ x < ∞
fX (x) =
{0 elsewhere.
Find 𝔼(X ) and Var(X ).
Select one:
𝔼(X ) = 3, Var(X ) = 3
𝔼(X ) = 3, Var(X ) = 9
𝔼(X ) = 2/3, Var(X ) = 2/9

𝔼(X ) = 2, Var(X ) = 3
Question 28
Correct
Mark 1 out of 1

1 −|x|
f X (x) = e − ∞ < x < ∞.
2

Select one:
𝔼(X ) = 1, Var (X ) = 1
𝔼(X ) = 0, Var(X ) = 2

𝔼(X ) = 0, Var (X ) = 1
𝔼(X ) = 0, Var (X ) = √2
‾
Question 29
Correct
Mark 1 out of 1

−x
ce 0 ≤ x < ∞
fX (x) =
{0 elsewhere
where c > 0 is a constant. Find ℙ(X > 100) .
Select one:
−1
e
−100
e

−1
1 − e
−100
1 − e
Question 30
Incorrect
Mark 0 out of 1
The random variables X and Y have the following joint probability density function:
1
0 < y < 1, 0 < x < 2
fX Y (x, y) = 2
{
0 elsewhere.
What is ℙ(X > Y) ?
Select one:
1/2
1/√ 2
‾

3/4
1/4
Question 31
Incorrect
Mark 0 out of 1
4xy 0 < x < 1, 0 < y < 1
fX Y (x, y) =
{0 elsewhere.
Find the conditional distribution of X given Y and use it to calculate

ℙ(X < 0.5|Y = 0.5) .
Select one:
0
1/3 
1/2
1/4
Question 32
Incorrect
Mark 0 out of 1
−x−y
e 0 < x < ∞, 0 < y < ∞
fX Y (x, y) =
{0 elsewhere.
What is ℙ(X < Y) ?
Select one:
1/2
1
0
−1
e
Question 33
Correct
Mark 1 out of 1
The random variable X has the following moment generating function:

MX (t) = e 2(e −1) .
t
Select one:
𝔼(X ) = 1, Var (X ) = 2
𝔼(X ) = e, Var(X ) = e
2
𝔼(X ) = 2, Var(X ) = 2

𝔼(X ) = 0, Var(X ) = 1
Question 34
Incorrect
Mark 0 out of 1
The non-negative integer-valued discrete random variable X has the following

probability generating function:
1
GX (s) = .
2−s

Find ℙ(X < 2) .
Select one:
1/8
1/2
3/4
1/4 
Question 35
Incorrect
Mark 0 out of 1
Let X1 , X2 , X3 be a random sample from the distribution of the random variable X

with an exponential distribution with mean β > 0 :
De ne the following estimators for β:
X1 +X2 +X3
β1̂ ̂
andβ3̂
3 4
:= , β 2 := X1 + X2 + X3 , := X1 + X2
3 7 7
Rank the estimators from the one with the smallest variance to the one with the
largest variance.
Select one:
̂ ̂ ̂
β2 , β3 , β1
̂ ̂ ̂
β1 , β3 , β2
̂ ̂ ̂
β1 , β2 , β3

̂ ̂ ̂
β3 , β1 , β2
Question 36
Incorrect
Mark 0 out of 1
Let X1 , X2 , X3 be a random sample from the distribution of the random variable X

with a Poisson distribution with rate λ > 0 :
De ne the following estimators for λ:
X1 +X2 +X3
̂
λ1 :=
̂
, λ2 := X1 + X2 + X3 , and λ3̂ :=
1
X1 +
3
X2
3 7 7

Rank the estimators from the one with the smallest variance to the one with the
largest variance.
Select one:
̂ ̂ ̂
λ1 , λ2 , λ3
̂ ̂ ̂
λ1 , λ3 , λ2

̂ ̂ ̂
λ2 , λ3 , λ1
̂ ̂ ̂
λ3 , λ1 , λ2
Question 37
Correct
Mark 1 out of 1
Let X1 , . . . , Xn (n ≥ 2) be a random sample from the distribution of the random

variable X with a Poisson distribution with rate λ > 0 :
De ne the following estimators for λ:
̂ 1 n 2 ̂ 1 n ̂ 1 3
λ1 := ∑ X , λ2 := ∑ Xi , and λ3 := X1 + X2
n i=1 i n i=1 7 7
Which of these estimators are unbiased?
Select one:
All of them
Only λ2̂

̂
λ2 and λ3̂
None of them
Question 38
Correct
Mark 1 out of 1
Let X1 , . . . , X36 be a random sample from a normal distribution with unknown

mean μ and known variance σ 2 = 121. A sample x 1 , . . . , x 36 is collected and the
sample mean from this sample is calculated to be x̄ = 22 . Based on this sample, a
95% con dence interval for μ is
Select one:
(22, ∞)
(0,22)
(0, ∞)
(18.41,25.59) 
Question 39
Incorrect
Mark 0 out of 1
Let X1 , . . . , X15 be a random sample from a normal distribution with unknown

mean μ and known variance σ 2 = 12 . Consider the following hypotheses:
H0 : μ = 10, H1 : μ > 10.
A sample x 1 , . . . , x 15 is collected and the sample mean from this sample is

calculated to be x̄ = 12 . The test statistic z and p -value p for testing these
hypotheses (UMP) based on this sample are:
Select one:
z = 2.24, p = 1.25%
z = 2.33, p = 1%

z = −2.24, p = 1.25%
z = 2.24, p = 2.50%
Question 40
Incorrect
Mark 0 out of 1
The random variables X and Y are believed to be linearly related by the equation
Y = a + bX + ϵ,
where a and b are constants and ϵ is a mean zero, normally distributed error term.
The following sample of pairs (x, y) is collected:
x 65 78 52 82 92 89 73 98 56 76
y 39 43 21 64 57 47 27 75 34 52
Using the method of least squares, calculate the values of a and b to 2 decimal
places.
Select one:
a = 12.06, b = −1.12

a = −24.58, b = 0.93
a = 0, b = 1
a = 23.45, b = 1.05

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10/11/2019 Quantitative Proﬁciency Test

My courses ▶ Quantitative Pro ciency Test ▶ Take the Test

Started on Sunday, 10 November 2019, 3:45 PM

If f : (−π /6, π /6) → ℝ is de ned by

If f is de ned by f (x) for every x then f is

The value of the integral

The value of the integral

Let A, B and C be square invertible matrices of the same size. If BT B = I = T

Let f : (0, ∞) → (0, ∞) and g : (0, ∞) → ℝ be de ned by

Consider the following statements:

Which of the statements are true?

The solution to the following differential equation

The complex number z can also be written as

The following series ∑ n=1

The following series ∑ n=1 0.2

Which of these statements are necessarily true based only on the information

None of the statements

Every Heka is either a Teta or a Jeka, but not both

Consider the following statements:

[i.] No Tetas are Jekas

+ 2y − 3xy, for every x, y) .

by changing the order of the integral. The answer is

Then the functionf de ned by

Consider the following partial differential equation (PDE):

where u = u(x, y) is the unknown function.

Which of these functions are solutions to the above PDE?

This section will test your statistical pro ciency.

The lifetimes of a group of 10 light bulbs are given below:

Let A, B and C be the following sets:

The random variable X has the following probability density function:

Find 𝔼(X ) and Var(X ).

𝔼(X ) = 2/3, Var(X ) = 2/9

The random variable X has the following probability density function:

The random variable X has the following probability density function:

where c > 0 is a constant. Find ℙ(X > 100) .

What is ℙ(X > Y) ?

Find the conditional distribution of X given Y and use it to calculate

What is ℙ(X < Y) ?

The random variable X has the following moment generating function:

Find 𝔼(X ) and Var(X ).

The non-negative integer-valued discrete random variable X has the following

Let X1 , X2 , X3 be a random sample from the distribution of the random variable X

Let X1 , X2 , X3 be a random sample from the distribution of the random variable X

Let X1 , . . . , Xn (n ≥ 2) be a random sample from the distribution of the random

Which of these estimators are unbiased?

Let X1 , . . . , X36 be a random sample from a normal distribution with unknown

Let X1 , . . . , X15 be a random sample from a normal distribution with unknown

A sample x 1 , . . . , x 15 is collected and the sample mean from this sample is

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