CFA Practice Question

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CFA Practice Question

Sampling that subdivides the population into subgroups with like characteristics and then samples a proportionate amount from each subgroup is called ______.

A. random
B. stratified
C. systematic
Correct Answer: B

User Contributed Comments 2

User Comment
CFAonTheBrain can someone please explain why?
UFCRP The example in the notes here is a good one. A Bond Index will contain an overtly large number of different types of bonds ranging in difference in maturity, duration, quality, and callability, etc. Using each of these differences, you can box in bonds with similar criterea and then base your sample from the population of each box. Therefore, stratifying (a.k.a. arranging) the bonds allows you to take a sample from each to represent the majority of what is held in the index. You're basically picking from the mean of each bond category.
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