CFA Practice Question

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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?

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.
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