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Free Questions › CFA › Quantitative Methods
Free CFA Quantitative Methods Practice Questions & Answers
1,200 exam-style Quantitative Methods questions. Pick your answer, hit Check answer, and see the worked solution — free to start, no signup.
100% free · No login to startQuestion 1051
A 5% trimmed mean removes:
Select an option first.
Correct answer: C — The lowest 2.5% and highest 2.5%
Explanation: ✔ Why correct: A 5% trim removes 2.5% from each tail, totaling 5%.
Question 1052
Quartiles divide a dataset into:
Select an option first.
Correct answer: B — 4 parts
Explanation: ✔ Why correct: Quartiles split the data into four equal parts.
Question 1053
The interquartile range (IQR) is defined as:
Select an option first.
Correct answer: B — Q3 − Q1
Explanation: ✔ Why correct: IQR = Q3 − Q1, measuring the spread of the middle 50% of data.
Question 1054
Percentiles divide a dataset into:
Select an option first.
Correct answer: B — 100 equal parts
Explanation: ✔ Why correct: Percentiles split the data into 100 equal parts.
Question 1055
Dispersion refers to:
Select an option first.
Correct answer: B — The variability around a central value
Explanation: ✔ Why correct: Dispersion measures how spread out the data are around a central tendency.
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Question 1056
The range is defined as:
Select an option first.
Correct answer: B — Maximum − minimum
Explanation: ✔ Why correct: Range = highest value − lowest value.
Question 1057
A disadvantage of the range is that it:
Select an option first.
Correct answer: B — Uses only two observations
Explanation: ✔ Why correct: Range only uses the maximum and minimum, ignoring all other values.
Question 1058
The mean absolute deviation (MAD) uses:
Select an option first.
Correct answer: C — All observations and absolute deviations
Explanation: ✔ Why correct: MAD is the average of the absolute deviations from the mean, using all observations.
Question 1059
A drawback of MAD is that it:
Select an option first.
Correct answer: B — Is mathematically less tractable
Explanation: ✔ Why correct: Absolute values make algebraic manipulation and theoretical work more difficult than with squared deviations.
Question 1060
Variance is defined as:
Select an option first.
Correct answer: B — The average of squared deviations
Explanation: ✔ Why correct: Variance is the average of squared deviations from the mean.
Question 1061
Standard deviation is:
Select an option first.
Correct answer: B — The square root of the variance
Explanation: ✔ Why correct: Standard deviation is defined as √variance.
Question 1062
Variance and standard deviation measure:
Select an option first.
Correct answer: C — Absolute dispersion
Explanation: ✔ Why correct: They measure the absolute amount of variability in the data.
Question 1063
Downside deviation focuses on:
Select an option first.
Correct answer: C — Deviations below a target
Explanation: ✔ Why correct: Downside deviation measures only returns below a specified target (e.g., minimum acceptable return).
Question 1064
A target semi-deviation requires:
Select an option first.
Correct answer: A — A specified minimum acceptable return
Explanation: ✔ Why correct: You must define a target level to measure deviations below it.
Question 1065
Relative dispersion is measured using:
Select an option first.
Correct answer: C — Coefficient of variation
Explanation: ✔ Why correct: CV = standard deviation ÷ mean, expressing dispersion relative to the mean.
Question 1066
The coefficient of variation (CV) is defined as:
Select an option first.
Correct answer: B — Standard deviation ÷ mean
Explanation: ✔ Why correct: CV = σ / μ, a unitless measure of relative risk.
Question 1067
A distribution with frequent small losses and a few extreme gains is:
Select an option first.
Correct answer: B — Positively skewed
Explanation: ✔ Why correct: Positive skew has a long right tail—occasional large gains.
Question 1068
A distribution with frequent small gains and a few extreme losses is:
Select an option first.
Correct answer: B — Negatively skewed
Explanation: ✔ Why correct: Negative skew has a long left tail—occasional large losses.
Question 1069
A symmetric distribution has:
Select an option first.
Correct answer: C — Mean = median
Explanation: ✔ Why correct: In a perfectly symmetric distribution, mean, median, and mode coincide.
Question 1070
Kurtosis measures:
Select an option first.
Correct answer: B — Tail heaviness
Explanation: ✔ Why correct: Kurtosis describes how heavy or light the tails of a distribution are relative to the center.
Question 1071
A leptokurtic distribution has:
Select an option first.
Correct answer: B — Fatter tails
Explanation: ✔ Why correct: Leptokurtic distributions have fat tails and more extreme outcomes than normal.
Question 1072
A platykurtic distribution has:
Select an option first.
Correct answer: B — Thinner tails
Explanation: ✔ Why correct: Platykurtic distributions have thinner tails and fewer extreme outcomes than normal.
Question 1073
A mesokurtic distribution has kurtosis:
Select an option first.
Correct answer: A — Equal to the normal distribution
Explanation: ✔ Why correct: Mesokurtic describes distributions with tail weight similar to the normal distribution.
Question 1074
Excess kurtosis is kurtosis:
Select an option first.
Correct answer: C — Relative to the normal distribution
Explanation: ✔ Why correct: Excess kurtosis = kurtosis − 3, measuring deviation from normal distribution kurtosis.
Question 1075
A dataset with extreme outliers is best handled by:
Select an option first.
Correct answer: D — Any of the above
Explanation: ✔ Why correct: Depending on context, you may keep, trim, or winsorize outliers; all are valid approaches.
Question 1076
Deleting outliers entirely corresponds to:
Select an option first.
Correct answer: B — Trimming
Explanation: ✔ Why correct: Trimming removes extreme observations from the dataset.
Question 1077
Replacing outliers with nearest values corresponds to:
Select an option first.
Correct answer: B — Winsorizing
Explanation: ✔ Why correct: Winsorizing caps extreme values at specified percentiles or nearest non-outlier values.
Question 1078
The median is less mathematically tractable because it:
Select an option first.
Correct answer: B — Uses only ranked positions
Explanation: ✔ Why correct: The median depends on the order of values, not their magnitudes, making algebraic manipulation harder.
Question 1079
The range is sensitive to outliers because it:
Select an option first.
Correct answer: C — Uses only the max and min
Explanation: ✔ Why correct: Range = max − min, so any extreme value directly affects it.
Question 1080
MAD is superior to the range because it:
Select an option first.
Correct answer: A — Uses all observations
Explanation: ✔ Why correct: MAD incorporates every observation’s deviation from the mean.
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