CFA Level I · CFA Level I Exam · Statistical Distributions for Financial Asset Prices and Returns
A continuous uniform random variable X lies between 0 and 80. An analyst wants the value x such that the probability that X exceeds x is 15%. The value x is closest to:
The value is about 68. The upper-tail probability of 15% means 15% of the 80-unit range lies above x, which is 12 units. Subtracting 12 from 80 gives 68. The value 12 would be the lower-tail 15th percentile instead.
- A12
- B68Correct
- C72
Explanation
P(X > x) = (80 − x)/80 = 0.15, so 80 − x = 12 and x = 68. The value 12 is the 15th percentile, which is the lower tail and wrong here. The value 72 corresponds to a 10% upper tail.
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