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**CFA Practice Question**

Select the correct statement(s).

II. A consistent estimator is an estimator where the sample size exceeds 30.

I. An estimator is efficient if the sample size exceeds 30.

II. A consistent estimator is an estimator where the sample size exceeds 30.

Correct Answer: Neither of these statements are correct.

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**User Contributed Comments**
6

User |
Comment |
---|---|

polanki |
why |

poomie83 |
consistent estimator has no relation to the magic number 30. It is do with the estimates close to the value of the popln parameter. Sample mean is a consistent est of the popln mean. |

poomie83 |
Efficient est is the unbiased est of the sample parameter wheere no other sampling dist has a smaller variance |

johntan1979 |
From the notes: A consistent estimator is one for which the probability of accurate estimates increases as sample size increases. Sample size > 30 does not explain consistency. |

sgossett86 |
Efficient if the variance is low. Consistent if the more samples cluster more towards the statistic intended to derive. |

ibrahim18 |
It's important to note the following: Desirable properties of an estimate: 1) Consitency: As you increase the sample size, the the probability of accuracy increases. 2) Unbiased: The sample estimate gives us the exact population parameter 3) Efficient: It minimises variance Please note that consistency has nothing to do with N>30. This is the property of a non normal variable that becomes normal as long as N>30. Also note that the the degree of confidence interval is 1 - alpha, where alpha is the level of confidence. For degree of confidence of 95%, alpha which is the level of confidence is 5%. The degree of confidence tells us what % of confidence we have that our estimate would fall within the stated interval. Degree of confidence has nothing to do with the population. |