CFA Practice Question

There are 434 practice questions for this study session.

CFA Practice Question

Sally Duvall is estimating the mean of a population with a sample of 35 observations. The variance is unknown. Which of the following statements is FALSE?
A. Using the t-test is a more conservative approach.
B. Using the z-test is a better approach for samples greater than 30.
C. If the underlying distribution is unknown, large samples can be tested with the help of the z-test due to the central limit theorem.
Explanation: While the z-test is applicable for larger samples, the t-test is a more appropriate method (to be safe).

User Contributed Comments 5

User Comment
danlan For larger samples, t-test becomes close to z-test, it's why it's acceptable to use z-test instead.
krisc Can z- test be used if the population variance is unknown??? If not, then how is A) correct???
adam08 yes it can be as long as the sample is large enough (# > 30).
kellyyang adamO8, I think that you can not use Z test for population variance is unknown.

However, if the population variance is unknown, and sample size n>30, you can use the t-test.
nostalgia if the population variance is unknown, and n >30, you can use both the z-test and the t-test, but the t-test would be the better approach.

if the population variance is known, you must use the z-test.
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