CFA Practice Question

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CFA Practice Question

What are the reasons for sampling?
Correct Answer: Sampling is used when:

1. The population is infinite.
2. There is a limited amount of time available.
3. The nature of the test is destructive.
4. The cost of gathering the data is a factor.

User Contributed Comments 8

User Comment
chamad would someone elaborate point 3?
JimM If the measurement destroys the item being measured (for example, measuring the purity of a manufactured chemical tested by burning it and analyzing the components of the gases released, something I used to do), then it is better to make the measurement on a sample than on the whole population. What if someone wants to check your results and there's nothing left to test? Or, if the items are meant to be sold, there's nothing left to sell if it's all be destructively tested.
robB There was a tennis ball example in the notes as well
fmhp What is a test?
2014 complete study of a subject is test
johntan1979 JimM nailed the explanation of point 3.

Another example is crash test of newly manufactured cars. You HAVE to sample, because if you don't, you have to crash ALL the cars manufactured to obtain crash test results :)
denisw123 Or the population is just extremely large, doesn't have to be *infinite*
greglong1 CTE in football players can only be diagnosed by brain autopsy. We can't dissect the brains of all NFL players to analyze the effects of repetitive concussions from playing football, so we have to rely on a representative sample of those who have already passed.
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