CFA Practice Question

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CFA Practice Question

100 items are sampled from a normal distribution. The sample mean is 10 and the sample standard deviation is 2; a 95% confidence interval for the sample mean must lie between ______.

A. 9.608 and 10.392
B. 9.324 and 10.676
C. 9.108 and 10.892
Correct Answer: A

User Contributed Comments 7

User Comment
aigulb 10+-1.96*2/100^.5
10-0.392=9.6 while 10+0.392=10.392
vinooka since we don't know the population standard deviation, are we not supposed to use t-tables instead?
stevecfa the sample size is 100, way over 30 so the z-value is very close the t-value.
johntan1979 Keyword is "normal distribution". Whenever you see that, Z is first choice.
Shaan23 Kind of odd cause in the notes it says if the population variance is normally distributed and the population variance is unknown use the t test IRRESPECTIVE of the sample size.
Shaan23 Add on to my comment. It doesnt state in the question if the pop variance is known or unknown...maybe thats why they use z....
Shaan23 So people read my previous two comments. The first comment is straight from the notes and is true.

Use the t test. When using the t test when using the t table with n=100 it is very close to the Z score because of the large sample. So in conclusion go with the notes and know how to use each test.
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