CFA Practice Question

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CFA Practice Question

When constructing confidence intervals for a normally distributed population, the t-distribution is used when ______

A. the population standard deviation is known.
B. the sample size is less than 30, regardless of the population standard deviation.
C. the population standard deviation is unknown and the sample size is less than 30.
Correct Answer: C

The t-distribution is used to compensate for σ being unknown and small sample size.

User Contributed Comments 2

User Comment
Shaan23 I guess its the most correct but in the notes it says to use the t-test if the poplulation is normally distributed and the variance unknown IRRESPECTIVE of sample size.
praj24 If we know the population SD then we're able to find the population variance. Hence, C.
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