CFA Practice Question

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CFA Practice Question

To estimate the average length of their employee's telephone calls to within 0.1 minutes at a 90% confidence level, FoneJack, Inc. must randomly sample how many employee phone calls? (The population can be assumed normal with a standard deviation of 0.8 minutes.)

A. 169
B. 14
C. 174
Correct Answer: C

We work with the formula for E, solving it for n, the sample size. First, a 90% level of confidence; we need z(0.05). Going to the normal table, we get z(0.05) = 1.645. Now, working with the E formula, we get n = 173.1856. So, the sample size needed is n = 174 (if there is a decimal part, we always go to the next whole number).

User Contributed Comments 3

User Comment
NikolaZ or you can use...

n = (z*standard deviation)^2 = 1.73186

Simply multiply that by 100
sgossett86 yeah but what if the standard of error would have been different, say .2... what you're saying to do wouldn't have worked nikola
robbiecow Someone correct me if I'm wrong, but the math seems wrong here. If you want the width to be .1, then you do the following:
(xbar - 1.645*.8/sqrt(n)) - (xbar + 1.645*.8/sqrt(n)) = .1 =
2(1.645(.8/sqrt(n)) = .1 ...some basic math...
n = 692.7424
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