- CFA Exams
- CFA Exam: Level I 2021
- Study Session 3. Quantitative Methods (2)
- Reading 10. Sampling and Estimation
- Subject 6. Confidence Intervals for the Population Mean
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.)
B. 14
C. 174
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 |