AuthorTopic: Standard Deviation question
@2005-04-09 02:21:46
On a recent college exam, I encountered a question about Upper and Lower Control limits. The question requires finding the upper and lower control limits using the following information:

z = 2.5, n = 4, "The process has a known standard deviation of 3 and a mean of 15."

So, is the UCL/LCL = 15 +/- (2.5*3); or is the UCL/LCL = 15 +/- (2.5*1.5) (the 1.5 comes from 3/(SQRT(4))).

The question comes down to whether the standard deviation is population or sample. What do you think?

@2005-04-11 02:21:58
what is your alpha level?

it looks to me since you are using a z distribution instead of a t distribution and standard deviation is known, you should be using a population stdev, right????

CFA Discussion Topic: Standard Deviation question

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Craig Baugh