- CFA Exams
- CFA Level I Exam
- Study Session 3. Quantitative Methods (2)
- Reading 10. Sampling and Estimation
- Subject 3. The Central Limit Theorem

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**CFA Practice Question**

According to the central limit theorem, a sampling distribution of the sample mean will be approximately normal only if ______.

A. the sample size is large.

B. the variance of the underlying distribution is known.

C. the underlying distribution is normally distributed.

**Explanation:**According to the central limit theorem, the sample mean of a population described by any probability distribution can be determined if the sample size is sufficiently large, e.g., equal to or greater than 30. This process is used to estimate the population mean and standard deviation, which are usually unknown.

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