- CFA Exams
- CFA Level I Exam
- Topic 1. Quantitative Methods
- Learning Module 5. Sampling and Estimation
- Subject 5. Confidence Intervals for the Population Mean and Selection of Sample Size
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. |