CFA Practice Question

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CFA Practice Question

A hypothesis test is constructed at the 5% level of significance where the population standard deviation is unknown. A random sample of size n = 18 yields a sample mean of 67 and a sample standard deviation of 6. The critical value for H0: μ > 70 is ______.

A. -1.740
B. -1.645
C. 1.645
Correct Answer: A

Because the population standard deviation, σ, is unknown, we use a t-distribution: t(0.05, 18 - 1). Looking in the t-table under df = 17 and under column 0.05, we get 1.740. The rejection region is to the bottom 5%, so the critical value is -1.740.

User Contributed Comments 8

User Comment
rufi will these tables provided in the exam?
arkot90 probably not...
achu I think the relevant table values will be provided. It's not reasonable to ask candidates to memorize table values.
bhaynes They are absolutley provided. You get a booklet with all relevant tables that you will needed.
thecfaguy They won't provide you with any booklet.... a set of relevant values will be provided for us to choose from....
safash there wont b any booklet....they wont even give you a spare paper to work out your problems on ,u have to some how manage it all on the question paper.
johntan1979 They WILL give you a table next to the question, just that they give you one with one-tailed and two-tailed together, so you still need to figure out which one to use.
sgossett86 you're not even allowed to use a calculator for most of the problems. and you have to answer a lot of these thought provoked questions in thirty seconds or less. they want to know that you know this stuff, not that you're reasoning or eliminating your way through these multiple choices...
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