CFA Practice Question

There are 434 practice questions for this study session.

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).

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.

User Contributed Comments 8

User Comment
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.
You need to log in first to add your comment.