CFA Practice Question

There are 434 practice questions for this study session.

CFA Practice Question

Which of the following would not be an example that would require a nonparametric test?
A. The variances between two sets of population need to be tested in order to determine if they are equal.
B. The data being analyzed is a set of rankings as opposed to actual values for a set of occurrences.
C. The population on which the tests are being conducted is known not to be normally distributed.
Explanation: Variance and arithmetic mean are the two most important parameters of a population. Hence, any test involving these two variables would be considered as a parametric test.

User Contributed Comments 4

User Comment
Mikehuynh Parametric test => parameters: variances, means
Nonparametric => no parameters
Patdotcom And, Is C an example that would require nonparametric test? Can anyone explain?
edrei7 Parametric tests are tests that make assumptions about the parameters (e.g. mean, standard deviation, and variance) of the population distribution from which the sample is drawn. C is making an assumption of the population distribution itself, not its parameters.
edrei7 Correction. Another quality of parametric tests is the assumption of normality of the underlying distribution. I guess C being not normally distributed made it the wrong answer.
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