- 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

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**CFA Practice Question**

For a normal population with s unknown, a sample of size n = 12 yields a sample mean of 54 and a sample standard deviation of 6. At a 95% confidence level, the error term E is ______ (to nearest 0.01).

B. 3.39

C. 3.81

A. 3.77

B. 3.39

C. 3.81

Correct Answer: C

Because s is unknown, we use the t-distribution. We work with E as shown below. The a level is 0.05/2 = 0.025 and the degrees of freedom is 12 - 1 or 11. The table value is 2.201.

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**User Contributed Comments**
8

User |
Comment |
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Aimy |
Is the 6 a sample standard deviation or a population standard deviation? I think E=2.201*6=13.206 if the 6 is a sample standard deviation. |

gambary |
are we going to be provided with t tables on the exam?? |

gizi |
i don't think so gambary. |

surob |
I think they do provide with sample table which will include the number needed for the problem |

TheHTrader |
I don't understand when you will need to divide a (level of significance) by 2 and when not? This question did but the previous one didn't. |

bhaynes |
Regarding the tables....yes, they provide you a booklet of all tables that you will need. |

endurance |
good question - keeps us focused on known vs unknown variances and small sample sizes |

floydtrend |
@theHtrader : this question asked for confidence intervals meaning +- that's why divide by 2. The last one doesn't include confidence interval, hence one tailed test. |