- 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**

A local college wants to find the percentage of students with access to the Internet. At a 95% level of confidence, how large of a sample would be needed to estimate the percentage to within 3 percentage points?

B. 1849

C. 33

A. 1068

B. 1849

C. 33

Correct Answer: A

Because we know nothing about the situation and have no estimate of p', we use p' = 0.5. Working with the formula for E, the error term, we get n = 1068. Thus, we need a sample size of n = 1,068 students.

###
**User Contributed Comments**
9

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

BonnieG |
why do you use .5 for p? |

tenny45 |
because as it says, no actual value of p' is given...we assume 0.5, it's part of the formula. |

Sumit14 |
is this for real! |

got2pass |
i think p=.5 because it's a 50/50 chance of either having internet or not having internet. |

apiccion |
@got2pass, sorry that's not correct. Using p = 0.50 makes sense because it's a worst case scenario. Given SIGMA = p(1-p), The value for SIGMA reaches its highest when p = 0.50. |

vinooka |
apiccion is spot-on! |

jayj001 |
apiccion all over it |

sgossett86 |
good insight |

Shaan23 |
damn appicon. I knew that but he's older then me and beat me to it. |