PRMIA Exam 8002 Topic 2 Question 94 Discussion

Actual exam question for PRMIA's 8002 exam

Question #: 94
Topic #: 2

[All 8002 Questions]

Over four consecutive years fund X returns 1%, 5%, -3%, 8%. What is the average growth rate of fund X over this period?

A2.67%

B2.75%

C2.49%

DNone of the above

Show Suggested Answer

Suggested Answer: D

by Marcelle at Oct 22, 2024, 07:15 AM

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Lashawnda

7 months ago

This question is as clear as mud, but I'm not about to let that stop me. I'm feeling bold, so I'm gonna go with D) b=2, a=0. Why? Because I'm a rebel, that's why! And who knows, maybe the examiner will be so impressed by my audacity that they'll give me extra points. Worth a shot, right?

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Marylin

6 months ago

I'm feeling bold like you, going with D) b=2, a=0

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Billye

6 months ago

I believe it's C) b=2, a=4

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Twana

6 months ago

I'm going with B) b=0.5, a=1.5

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Van

6 months ago

I think the answer is A) b=0.5, a=2.5

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Marg

7 months ago

Okay, let's get this straight. If the covariance is 10 and the variance of X is 5, then the slope b is definitely 0.5. Now, the y-intercept a... Hmm, I'm feeling saucy today, so I'm gonna go with C) b=2, a=4. Why? Because I like to keep the examiners on their toes!

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Paola

6 months ago

Yeah, it can get confusing. Thanks for the clarification!

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Lelia

6 months ago

No problem! It's easy to get mixed up with all those numbers.

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Jaleesa

6 months ago

Oh really? I was so sure about my answer. Thanks for pointing that out.

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Harrison

6 months ago

I think you might have mixed up the values. The correct values for a and b are b=0.5, a=1.5.

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Kristine

7 months ago

Oof, regression analysis? More like regression headache, am I right? Anyway, let's see here... If the mean of X is 1 and the mean of Y is 2, and the covariance is 10, then the slope b must be 0.5. As for the y-intercept a, I'm gonna have to go with B) b=0.5, a=1.5. Nailed it, I think?

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Vallie

7 months ago

Hmm, this looks tricky. I'm gonna go with C) b=2, a=4. Why? Because I like the sound of those big numbers, and who doesn't love a confident answer, right? Time to impress the examiner!

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Stephaine

6 months ago

I believe it's D) b=2, a=0

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Rupert

6 months ago

I agree with you, C) b=2, a=4 sounds good to me

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Ellen

6 months ago

I agree with C) b=2, a=4

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Joanne

7 months ago

I'm not sure, but I would go with B) b=0.5, a=1.5

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Aliza

7 months ago

I think the correct answer is A) b=0.5, a=2.5

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Sharee

7 months ago

I'm going with B) b=0.5, a=1.5

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Annamaria

7 months ago

I think the answer is A) b=0.5, a=2.5

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Carole

7 months ago

I disagree, I believe the answer is B) b=0.5, a=1.5 because of the covariance between X and Y.

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Amos

8 months ago

I think the answer is A) b=0.5, a=2.5 because the mean of Y is 2 and the mean of X is 1.

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Tony

8 months ago

Alright, let's think this through. If cov(X,Y)=10 and var(X)=5, then the slope b must be 0.5. Now, we just need to find the y-intercept a. With the means of X and Y being 1 and 2 respectively, I'd say the answer is B) b=0.5, a=1.5. Easy peasy!

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