- 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
CFA Practice Question
When finding a confidence interval for the population mean, when is t-score used as the critical value (assuming the population is normally distributed)?
A. The sample size is less than 30 or you do not know the population standard deviation.
B. The sample size is 30 or more or you know the population standard deviation.
C. The sample size is less than 30 and you do not know the population standard deviation.
User Contributed Comments 7
| User | Comment |
|---|---|
| shawngardy | Is there any difference between answers a and c |
| gizi | The word "and" and the word "or" |
| lagoste | I thought that if we don't know the population std deviation, we should always use t-test, independent on the size of the sample. then, it would be "or" instead of "and". |
| nsmwaura | If n is greater than 30 the t table approaches the normal distribution table |
| octavianus | If the population is normally distributed, and the population variance is known, use a z-score irrespective of sample size. If the population is normally distributed, and the population variance is unknown, use a t-score irrespective of sample size. If the population is not normally distributed, and the population variance is known, use a z-score only if n >= 30, otherwise it cannot be done. If the population is not normally distributed, and the population variance is unknown, use a t-score only if n >= 30, otherwise it cannot be done. |
| chamad | I think all answers are corect but answer the last is the only one where z can not be used. This is what maybe makes this answer the most accurate |
| Drzewes | A is wrong. Considering "or" we assume t distr will be used when n<30 or sigma unknown. That would mean, when n<30 and sigma is known, we should use t-distr, which is not true. |