- CFA Exams
- CFA Level I Exam
- Topic 1. Quantitative Methods
- Learning Module 7. Estimation and Inference
- Subject 2. The Central Limit Theorem and Inference
CFA Practice Question
A researcher is studying the number of trees that contain a certain type of locust in the Smoky Mountains each year. He has found that an average of 25% of the trees contain the locust, with a standard deviation of 4%. If 100 trees were randomly sampled, which of the following statements is incorrect?
A. The shape of the sampling distribution is approximately normal and the mean of the sampling distribution is approximately 25%.
B. The standard deviation of the sampling distribution is σ/n1/2.
C. The standard deviation of the sample mean is approximately 4%.
User Contributed Comments 5
| User | Comment |
|---|---|
| Janey | I guess you can tell this from using the central limit theorem. If the pop st. dev is known and the same size is larger than 30, then the sample dev. will be approximately the same as the pop. |
| octavianus | Problem asks for which answer is INCORRECT, thus the last choice is WRONG, and standard deviation of the samp dist. is s/n ^(1/2) |
| aakash1108 | The standard deviation of the sample is not 4%. instead it is (s/sqrt n). |
| clarelau | I got this wrong. I didn't notice it was asking for incorrect one |
| BaxTra | I understand CLT to address the sampling distribution of the sample means. That is not made clear in the answers and it sounds as though option A refers to the sampling distribution of the sample. |