CFA Practice Question

There are 434 practice questions for this study session.

CFA Practice Question

An analyst gathered the following information about a stock index:

Mean net income for all companies in the index: $2.4 million
Standard deviation of net income for all companies in the index: $3.2 million

If the analyst takes a sample of 36 companies from the index, the standard error of the sample mean (in $) is closest to ______.
A. $88,889
B. $400,000
C. $533,333
Explanation: The standard error of the sample mean is equal to the population standard deviation divided by the square root of the number of observations in the sample: $3,200,000 / 361/2 = $533,333.

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