CFA Practice Question

CFA Practice Question

Estimator X for a population parameter has a sampling distribution with the least variance. Estimator Y approaches the true value of population parameter when the sample size becomes large. The expected value of estimator d equals the true value of the population parameter. The estimators X Y, d are:
A. unbiased, efficient, and consistent respectively.
B. unbiased, consistent, and efficient respectively.
C. efficient, consistent, and unbiased respectively.
Explanation: These are the definitions of efficient, consistent, and unbiased.

User Contributed Comments 1

User Comment
praj24 1) Unbiased - The expected value (mean) of the estimate's sampling distribution is equal to the underlying population parameter; that is, there is no upward or downward bias.

2) Efficiency - While there are many unbiased estimators of the same parameter, the most efficient has a sampling distribution with the smallest variance.

3) Consistency - Larger sample sizes tend to produce more accurate estimates; that is, the sample parameter converges on the population parameter.
You need to log in first to add your comment.