- 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
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.

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. |