CFA Practice Question

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CFA Practice Question

A sample of 5 persons with hypertension underwent a special blood-pressure-reducing treatment program that resulted in the following values of reduction in systolic blood pressure (i.e., the scores give SBP after treatment - SBP before treatment): -5, 10, 20, 5, 10.

Suppose, for a second sample of 5 persons, the sample mean is 10 and the sample variance is 25. Which of the following statements about this second sample is not correct?
A. A person with a SBP reduction of -5 units is 3 standard deviations below the sample mean.
B. The sum of the squared deviations of SBP reduction scores from the sample mean, i.e., SUM((X - XBAR)2) = 100.
C. Any SBP reduction score between 0 and 20 is within one standard deviation of the sample mean.
Explanation: 10 ± SQRT(25) is the interval from 5 to 15.

User Contributed Comments 13

User Comment
Carol1 Why is equation (SUM((...) correct? I will say this equation exist when the the left side need to divide the sample size.
wollogo It says "SUM of squared deviations" so you are not dividing by the sample size.
stevelaz Can someone please explain all the options
sunilcfa It says 5 and 15 lie between the range 0 to 20
mchu it is n-1, rather than n
Andrewua A is true: 10-3*SQRT(25)=-5.
u0302638 SUM((X - XBAR)2) = 100.
why is this correct?
Gooner7 @u0....

I have same question, but through knew 3rd choice was wrong
bhavini how does the sum of squared deviations add up to 100
Nando1 Answer B is correct because if you work backwards from the variance [25 * 4 (n-1) = 100] you will see that the sum of the squared deviations has to be 100. (x-xbar)^2 is the result before dividing by n-1 to get the variance.
RAustin A is right: SD = 5 (Sq. rt. of Var. of 25), so 3 SDs to left of 10 would be -5.
C is wrong: Any score between 0 & 20 is NOT 1 SD away from the mean of 10; -5 is 3 SDs away, 0 is 2 SDs away, etc.
dream007 best to guess a question like this and move on...:)
birdperson well said @Nando1 | variance = (xi - xbar)^2/(n-1) | 25 = (xi - xbar)^2/(5-1) | 25 * 4 = (xi - xbar)^2.... B is correct. A is correct as stated by@andrewua
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