- CFA Exams
- CFA Level I Exam
- Study Session 3. Quantitative Methods (2)
- Reading 10. Sampling and Estimation
- Subject 6. Confidence Intervals for the Population Mean

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**CFA Practice Question**

The main difference between the t and z statistic is that the t statistic ______.

A. is not normally distributed like the z statistic

B. is more variable than the z statistic

C. is less variable than the z statistic

**Explanation:**

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**User Contributed Comments**
9

User |
Comment |
---|---|

andrewsutton |
Any special reason why "is not normally distributed like the z statistic" is not correct? |

gweiden |
because both are normally distributed. |

ehc0791 |
Not sure t-distribution can be called normal distribution. I saw a lot of case that z-distribution is called normal distribution. |

micheleus |
the t-statistic is more conservative because the t-statistic tends to be greater than the z-statistic, and therefore usingt-statistic will result in a "wider confidence interval"----> ts is more variable than zs |

kellyyang |
Yes Micheleus, you are right! |

janis36 |
I thought t-distribution is not normal. |

Marinov |
I thought the z-distribution is normal |

milica818 |
the t-distribution and z-distribution are both normally distributed, but the t-distribution has fatter tails |

edrei7 |
When the sample size gets large enough (i.e. >=30), both the t and z distributions will look approximately the same. |