- CFA Exams
- CFA Level I Exam
- Topic 1. Quantitative Methods
- Learning Module 7. Estimation and Inference
- Subject 2. The Central Limit Theorem and Inference

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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 ______.

B. mean = 70 and standard deviation = 0.8

C. mean = 70 and standard deviation = 1.25

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).

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**User Contributed Comments**
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User |
Comment |
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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? |