- CFA Exams
- CFA Level I Exam
- Topic 1. Quantitative Methods
- Learning Module 2. Organizing, Visualizing, and Describing Data
- Subject 6. Measures of Central Tendency
CFA Practice Question
The owner of a large pet store chain in the United States wants to open a store in a new city. He is interested in the number of households in this city with pets. The owner randomly surveys 800 of the city's households, which shows that 82% of the 800 households have pets.
B. parameter; Opening a pet store in the new city is a good idea.
C. statistic; Opening a pet store in the new city is a good idea.
Does "82% of the 800 households have pets" describe a statistic or a parameter, and what conclusion might be drawn from the survey using inferential statistics?
A. parameter; Opening a pet store in the new city is not a good idea.
B. parameter; Opening a pet store in the new city is a good idea.
C. statistic; Opening a pet store in the new city is a good idea.
Correct Answer: C
User Contributed Comments 7
User | Comment |
---|---|
cbb1 | Statistic relates to a sample; parameter relates to a population |
Carter | You got it. |
Bibhu | Good answer |
cp24 | p - p ; s - s |
vivacita | so in this case, what could be the parameter? |
mynotes | Getting parameter value is costly, that's why owner selected the random sample of size 800. However to your answer: (e.g.) 82% of all households in a new city have dogs. |
2014 | Parameter is computed from sample. Statistcis means analysis and interpretation of information for decision making. 82% is analysis used for making decision |