CFA Practice Question

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CFA Practice Question

For x, a normal random variable with mean = 70 and standard deviation = 5, taking all samples of size n = 16, the distribution of the x-bars is normal with parameters ______.

A. N = 16 and p = 0.8
B. mean = 70 and standard deviation = 0.8
C. mean = 70 and standard deviation = 1.25
Correct Answer: C

The sampling distribution for all samples of size n = 16 taken from a normal population is normal with mean = mean of the population = 70 and standard deviation = standard deviation of the population divided by the square root of n. So, the standard deviation of the sampling distribution is 5/4 = 1.25 (4 is the square root of 16).

User Contributed Comments 1

User Comment
GouldenOne I though that was the formula for standard error of the sampling mean. Error is also the formula for standard deviation which is given?
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