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Basic Question 2 of 22
You are thinking of using a t procedure to construct a 95% confidence interval for the mean of a population. You suspect that the distribution of the population is not normal and may be skewed. Which of the following statements is correct?
B. You may use the t procedure, provided your sample size is large, say, at least 30.
C. You may use the t- procedure because it is robust to non-normality.
A. You should not use the t procedure because the population does not have a normal distribution.
B. You may use the t procedure, provided your sample size is large, say, at least 30.
C. You may use the t- procedure because it is robust to non-normality.
User Contributed Comments 6
| User | Comment |
|---|---|
| pisanc06 | Does this contradict the previous question? |
| NikolaZ | No it does not, since when the sample size exceeds 30, it is best to use the z-table as it is more precise. |
| johntan1979 | There is no mentioning whether pop var is known or not. So t is preferable. |
| sgossett86 | I made a six column four row chart with headings in the first two rows, kinda like a matrix, to visualize conditions where the respective tests are applicable. |
| cumc | can someone please give me more details ? |
| gc1210 | @johntan1979, as long as the sample size is large we could use either t or z (regardless of knowing the population variance or not), why is there a preference towards t? Is it just because t gives a more conservative answer? |
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Tamara Schultz
Learning Outcome Statements
calculate and interpret a confidence interval for a population mean, given a normal distribution with 1) a known population variance, 2) an unknown population variance, or 3) an unknown population variance and a large sample size;
CFA® 2024 Level I Curriculum, Volume 1, Module 5.