CFA Practice Question

There are 410 practice questions for this study session.

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.

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
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