Question #1 of 78 Question ID: 1456540

Which of the following is least likely a prediction of the central limit theorem?

The mean of the sampling distribution of the sample means will be equal to the
A)
population mean.
B) The standard error of the sample mean will increase as the sample size increases.
The variance of the sampling distribution of sample means will approach the
C)
population variance divided by the sample size.

Question #2 of 78 Question ID: 1482628

An analyst divides the population of U.S. stocks into 10 equally sized sub-samples based on
market value of equity. Then he takes a random sample of 50 from each of the 10 sub-
samples and pools the data to create a sample of 500. This is an example of:

A) simple random sampling.

B) stratified random sampling.
C) systematic cross-sectional sampling.

Question #3 of 78 Question ID: 1456536

Which of the following statements regarding the central limit theorem (CLT) is least
accurate? The CLT:

states that for a population with mean µ and variance σ2, the sampling distribution
A) of the sample means for any sample of size n will be approximately normally
distributed.

gives the variance of the distribution of sample means as σ2 / n, where σ2 is the

B)
population variance and n is the sample size.
C) holds for any population distribution, assuming a large sample size.
Question #4 of 78 Question ID: 1456575

Student's t-Distribution

Level of Significance for One-Tailed Test

df 0.100 0.050 0.025 0.01 0.005 0.0005

Level of Significance for Two-Tailed Test

df 0.20 0.10 0.05 0.02 0.01 0.001

24 1.318 1.711 2.064 2.492 2.797 3.745

25 1.316 1.708 2.060 2.485 2.787 3.725

26 1.315 1.706 2.056 2.479 2.779 3.707

27 1.314 1.703 2.052 2.473 2.771 3.690

Books Fast, Inc., prides itself on shipping customer orders quickly. Books Fast sampled 27 of
its customers within a 200-mile radius and found a mean delivery time of 76 hours, with a
sample standard deviation of 6 hours. Based on this sample and assuming a normal
distribution of delivery times, what is the confidence interval for the mean delivery time at
5% significance?

A) 68.50 to 83.50 hours.

B) 65.75 to 86.25 hours.
C) 73.63 to 78.37 hours.

Question #5 of 78 Question ID: 1456580

Student's t-Distribution

Level of Significance for One-Tailed Test

df 0.100 0.050 0.025 0.01 0.005 0.0005

Level of Significance for Two-Tailed Test

df 0.20 0.10 0.05 0.02 0.01 0.001

24 1.318 1.711 2.064 2.492 2.797 3.745

25 1.316 1.708 2.060 2.485 2.787 3.725

26 1.315 1.706 2.056 2.479 2.779 3.707

27 1.314 1.703 2.052 2.473 2.771 3.690

A random sample of 25 Indiana farms had a mean number of cattle per farm of 27 with a
sample standard deviation of five. Assuming the population is normally distributed, what
would be the 95% confidence interval for the number of cattle per farm?

A) 25 to 29.
B) 22 to 32.
C) 23 to 31.

Question #6 of 78 Question ID: 1456529

An equity analyst needs to select a representative sample of manufacturing stocks. Starting

with the population of all publicly traded manufacturing stocks, she classifies each stock into
one of the 20 industry groups that form the Index of Industrial Production for the
manufacturing industry. She then selects four stocks from each industry. The sampling
method the analyst is using is best characterized as:

A) systematic sampling.
B) random sampling.
C) stratified random sampling.

Question #7 of 78 Question ID: 1456559

Which of the following characterizes the typical construction of a confidence interval most
accurately?

A) Standard error +/- (Point estimate / Reliability factor).

B) Point estimate +/- (Reliability factor × Standard error).
C) Point estimate +/- (Standard error / Reliability factor).

Question #8 of 78 Question ID: 1456531

Thomas Merton, a car industry analyst, wants to investigate a relationship between the
types of ads used in advertising campaigns and sales to customers in certain age groups. In
order to make sure he includes manufacturers of all sizes, Merton divides the industry into
four size groups and draws random samples from each group. What sampling method is
Merton using?

A) Cross-sectional sampling.
B) Stratified random sampling.
C) Simple random sampling.

Question #9 of 78 Question ID: 1456574

A traffic engineer is trying to measure the effects of carpool-only lanes on the expressway.
Based on a sample of 1,000 cars at rush hour, he finds that the mean number of occupants
per car is 2.5, with a standard deviation of 0.4. Assuming that the population is normally
distributed, what is the confidence interval at the 5% significance level for the number of
occupants per car?

A) 2.475 to 2.525.
B) 2.455 to 2.555.
C) 2.288 to 2.712.

Question #10 of 78 Question ID: 1456552

As a sample size is increased, which of the following statements best describes the change in
the standard error of the sample mean and the size of the confidence interval for the true
mean?

A) The standard error decreases and the confidence interval narrows.

B) The confidence interval widens while the standard error decreases.
C) The standard error increases while the confidence interval narrows.

Question #11 of 78 Question ID: 1456524

An advantage of nonprobability sampling, as compared to probability sampling, is lower:

A) reliance on judgment.
B) sampling error.
C) cost.

Question #12 of 78 Question ID: 1456579

A local high school basketball team had 18 home games this season and averaged 58 points
per game. If we assume that the number of points made in home games is normally
distributed, which of the following is most likely the range of points for a confidence interval
of 90%?

A) 26 to 80.
B) 34 to 82.
C) 24 to 78.

Question #13 of 78 Question ID: 1456599

When sampling from a population, the most appropriate sample size:

A) is at least 30.
 involves a trade-off between the cost of increasing the sample size and the value of
B)
increasing the precision of the estimates.
minimizes the sampling error and the standard deviation of the sample statistic
C)
around its population value.

Question #14 of 78 Question ID: 1456567

Cumulative Z-Table

z 0.05 0.06 0.07 0.08 0.09

2.4 0.9929 0.9931 0.9932 0.9934 0.9936

2.5 0.9946 0.9948 0.9949 0.9951 0.9952

2.6 0.9960 0.9961 0.9962 0.9963 0.9964

2.7 0.9970 0.9971 0.9972 0.9973 0.9974

The average return on the Russell 2000 index for 121 monthly observations was 1.5%. The
population standard deviation is assumed to be 8.0%. What is a 99% confidence interval for
the mean monthly return on the Russell 2000 index?

A) 0.1% to 2.9%.
B) -0.4% to 3.4%.
C) -6.5% to 9.5%.

Question #15 of 78 Question ID: 1456595

The average annual return over 20 years for a sector of mutual funds, calculated for the
population of funds in that sector that have 20 years of performance history, is most likely
to:

A) fairly state returns for the fund sector.

B) understate returns for the fund sector.
C) overstate returns for the fund sector.
Question #16 of 78 Question ID: 1456527

Sampling error can be defined as:

A) rejecting the null hypothesis when it is true.

the difference between a sample statistic and its corresponding population
B)
parameter.
C) the standard deviation of a sampling distribution of the sample means.

Question #17 of 78 Question ID: 1456557

Shawn Choate wants to choose a variable of study that has the most desirable statistical
properties. The statistic he is presently considering has the following characteristics:

The expected value of the sample mean is equal to the population mean.
The variance of the sampling distribution is smaller than that for other estimators of
the parameter.
As the sample size increases, the standard error of the sample mean increases and
the sampling distribution is centered more closely on the mean.

Choate's estimator is:

A) unbiased and efficient.

B) efficient and consistent.
C) unbiased and consistent.

Question #18 of 78 Question ID: 1456547

A sample of size n = 25 is selected from a normal population. This sample has a mean of 15
and a sample variance of 4. What is the standard error of the sample mean?

A) 0.4.
B) 0.8.
C) 2.0.
Question #19 of 78 Question ID: 1456541

Suppose the mean debt/equity ratio of the population of all banks in the United States is 20
and the population variance is 25. A banking industry analyst uses a computer program to
select a random sample of 50 banks from this population and compute the sample mean.
The program repeats this exercise 1000 times and computes the sample mean each time.
According to the central limit theorem, the sampling distribution of the 1000 sample means
will be approximately normal if the population of bank debt/equity ratios has:

A) a Student's t-distribution, because the sample size is greater than 30.

B) any probability distribution.
C) a normal distribution, because the sample is random.

Question #20 of 78 Question ID: 1456584

In which one of the following cases is the t-statistic the appropriate one to use in the
construction of a confidence interval for the population mean?

The distribution is nonnormal, the population variance is unknown, and the sample
A)
size is at least 30.
The distribution is normal, the population variance is known, and the sample size is
B)
less than 30.
The distribution is nonnormal, the population variance is known, and the sample
C)
size is at least 30.

Question #21 of 78 Question ID: 1456551

From a population of 5,000 observations, a sample of n = 100 is selected. Calculate the

standard error of the sample mean if the population variance is 2500.

A) 0.2.
B) 250.
C) 5.00.
Question #22 of 78 Question ID: 1456528

Which of the following is least likely a step in stratified random sampling?

A) The population is divided into strata based on some classification scheme.

B) The size of each sub-sample is selected to be the same across strata.
C) The sub-samples are pooled to create the complete sample.

Question #23 of 78 Question ID: 1456570

A nursery sells trees of different types and heights. Suppose that 75 trees chosen at random
are sold for planting at City Hall. These 75 trees average 60 inches in height with a standard
deviation of 16 inches.

Using this information, construct a 95% confidence interval for the mean height of all trees
in the nursery.

A) 60 ± 1.96(16).
B) 60 ± 1.96(1.85).
C) 0.8 ± 1.96(16).

Question #24 of 78 Question ID: 1456598

A scientist working for a pharmaceutical company tries many models using the same data
before reporting the one that shows that the given drug has no serious side effects.
The scientist's results are most likely to exhibit:

A) data snooping bias.

B) look-ahead bias.
C) sample selection bias.

Question #25 of 78 Question ID: 1456573

Which of the following statements about a confidence interval for a population mean is most
accurate?

For a sample size of 30, using a t-statistic will result in a wider confidence interval for
A)
a population mean than using a z-statistic.
When a z-statistic is acceptable, a 95% confidence interval for a population mean is
B)
the sample mean plus-or-minus 1.96 times the sample standard deviation.
If the population variance is unknown, a large sample size is required in order to
C)
estimate a confidence interval for the population mean.

Question #26 of 78 Question ID: 1456562

Which of the following statements about sampling and estimation is most accurate?

A confidence interval estimate consists of a range of values that bracket the

A)
parameter with a specified level of probability, 1 − β.
B) Time-series data are observations over individual units at a point in time.
A point estimate is a single estimate of an unknown population parameter
C)
calculated as a sample mean.

Question #27 of 78 Question ID: 1456597

The practice of repeatedly using the same database to search for patterns until one is found
is most likely to result in:

A) data snooping bias.

B) look-ahead bias.
C) sample selection bias.

Question #28 of 78 Question ID: 1456565

Student's t-Distribution

Level of Significance for One-Tailed Test

df 0.100 0.050 0.025 0.01 0.005 0.0005

Level of Significance for Two-Tailed Test

df 0.20 0.10 0.05 0.02 0.01 0.001

30 1.310 1.697 2.042 2.457 2.750 3.646

40 1.303 1.684 2.021 2.423 2.704 3.551

60 1.296 1.671 2.000 2.390 2.660 3.460

120 1.289 1.658 1.980 2.358 2.617 3.373

Based on Student's t-distribution, the 95% confidence interval for the population mean
based on a sample of 40 interest rates with a sample mean of 4% and a sample standard
deviation of 15% is closest to:

A) -0.794% to 8.794%.
B) -0.851% to 8.851%.
C) 1.261% to 6.739%.

Question #29 of 78 Question ID: 1456583

Student's t-Distribution

Level of Significance for One-Tailed Test

df 0.100 0.050 0.025 0.01 0.005 0.0005

Level of Significance for Two-Tailed Test

df 0.20 0.10 0.05 0.02 0.01 0.001

40 1.303 1.684 2.021 2.423 2.704 3.551

60 1.296 1.671 2.000 2.390 2.660 3.460

120 1.289 1.658 1.980 2.358 2.617 3.373

The average salary for a sample of 61 CFA charterholders with 10 years of experience is
$200,000, and the sample standard deviation is $80,000. Assume the population is normally
distributed. Which of the following is a 99% confidence interval for the population mean
salary of CFA charterholders with 10 years of experience?

A) $172,514 to $227,486.
B) $160,000 to $240,000.
C) $172,754 to $227,246.

Question #30 of 78 Question ID: 1456566

A sample of 25 junior financial analysts gives a mean salary (in thousands) of 60. Assume the
population variance is known to be 100. A 90% confidence interval for the mean starting
salary of junior financial analysts is most accurately constructed as:

A) 60 ± 1.645(10).
B) 60 ± 1.645(2).
C) 60 ± 1.645(4).

Question #31 of 78 Question ID: 1456555

The sample mean is an unbiased estimator of the population mean because the:
 sampling distribution of the sample mean has the smallest variance of any other
A)
unbiased estimators of the population mean.
sample mean provides a more accurate estimate of the population mean as the
B)
sample size increases.
C) expected value of the sample mean is equal to the population mean.

Question #32 of 78 Question ID: 1456538

According to the Central Limit Theorem, the distribution of the sample means is
approximately normal if:

A) the sample size n > 30.

B) the standard deviation of the population is known.
C) the underlying population is normal.

Question #33 of 78 Question ID: 1456564

Student's t-Distribution

Level of Significance for One-Tailed Test

df 0.100 0.050 0.025 0.01 0.005 0.0005

Level of Significance for Two-Tailed Test

df 0.20 0.10 0.05 0.02 0.01 0.001

40 1.303 1.684 2.021 2.423 2.704 3.551

60 1.296 1.671 2.000 2.390 2.660 3.460

120 1.289 1.658 1.980 2.358 2.617 3.373

The approximate 99% confidence interval for the population mean based on a sample of 60
returns with a mean of 7% and a sample standard deviation of 25% is closest to:

A) 0.546% to 13.454%.
B) 1.584% to 14.584%.
C) -1.584% to 15.584%.
Question #34 of 78 Question ID: 1456532

An analyst is asked to select a sample of securities from those included in a broad-based

index that can be expected to have the same return as the index while preserving the key
risk exposures of the index. The analyst should most appropriately use:

A) simple random sampling.

B) constrained random sampling.
C) stratified random sampling.

Question #35 of 78 Question ID: 1456588

Which technique for estimating the standard error of the sample mean involves calculating
multiple means from the same sample, each with one observation removed from the
sample?

A) Jackknife.
B) Bootstrap.
C) Sample variance.

Question #36 of 78 Question ID: 1456556

An efficient estimator is most accurately described as one that:

A) has an expected value equal to the parameter it is estimating.

B) becomes more accurate as the sample size increases.
has a sampling distribution with a smaller variance than that of all other unbiased
C)
estimators of the parameter.

Question #37 of 78 Question ID: 1456525

Sampling error is the:

A) difference between a sample statistic and its corresponding population parameter.

difference between the point estimate of the mean and the mean of the sampling
B)
distribution.
C) estimation error created by using a non-random sample.

Question #38 of 78 Question ID: 1456561

Which of the following statements about sampling and estimation is most accurate?

The probability that a parameter lies within a range of estimated values is given by
A)
α.
The standard error of the sample means when the standard deviation of the
B) population is known equals σ / √n, where σ = sample standard deviation adjusted by
n − 1.
The standard error of the sample means when the standard deviation of the
C)
population is unknown equals s / √n, where s = sample standard deviation.

Question #39 of 78 Question ID: 1456587

In a confidence interval for the mean of a normally distributed population with a sample size
of 25, it is least likely that:

A) a t-distributed test statistic is appropriate if the population variance is unknown.

B) a z-distributed test statistic is appropriate if the population variance is known.
C) no test statistic is available.

Question #40 of 78 Question ID: 1456549

If the number of offspring for females of a certain mammalian species has a mean of 16.4
and a standard deviation of 3.2, what will be the standard error of the sample mean for a
survey of 25 females of the species?
A) 0.64.
B) 0.07.
C) 1.56.

Question #41 of 78 Question ID: 1456589

An advantage of the bootstrap method of estimating the standard error of sample means,
compared to estimating it based on a sample variance, is that the bootstrap method:

A) is less computationally demanding.

B) only requires one sample to be taken.
C) can be applied to complex statistics.

Question #42 of 78 Question ID: 1456542

If the true mean of a population is 16.62, according to the central limit theorem, the mean of
the distribution of sample means, for all possible sample sizes n will be:

A) 16.62 / √n.
B) indeterminate for sample with n < 30.
C) 16.62.

Question #43 of 78 Question ID: 1456600

To test the hypothesis that actively managed international equities mutual funds
outperformed an appropriate benchmark index, an analyst selects all of the current
international equities funds that have been in existence for at least 10 years. His test results
will most likely be subject to:

A) survivorship bias.
B) look-ahead bias.
C) time period bias.
Question #44 of 78 Question ID: 1456554

The sample mean is a consistent estimator of the population mean because the:

sampling distribution of the sample mean has the smallest variance of any other
A)
unbiased estimators of the population mean.
sample mean provides a more accurate estimate of the population mean as the
B)
sample size increases.
C) expected value of the sample mean is equal to the population mean.

Question #45 of 78 Question ID: 1456581

Student's t-Distribution

Level of Significance for One-Tailed Test

df 0.100 0.050 0.025 0.01 0.005 0.0005

Level of Significance for Two-Tailed Test

df 0.20 0.10 0.05 0.02 0.01 0.001

40 1.303 1.684 2.021 2.423 2.704 3.551

60 1.296 1.671 2.000 2.390 2.660 3.460

120 1.289 1.658 1.980 2.358 2.617 3.373

From a sample of 41 monthly observations of the S&P Mid-Cap index, the mean monthly
return is 1% and the sample variance is 36. For which of the following intervals can one be
closest to 95% confident that the population mean is contained in that interval?

A) 1.0% ± 1.9%.
B) 1.0% ± 6.0%.
C) 1.0% ± 1.6%.

Question #46 of 78 Question ID: 1456537

The central limit theorem concerns the sampling distribution of the:

A) population mean.
B) sample mean.
C) sample standard deviation.

Question #47 of 78 Question ID: 1456585

Which of the following would result in a wider confidence interval? A:

A) higher degree of confidence.

B) greater level of significance.
C) higher alpha level.

Question #48 of 78 Question ID: 1456546

Melissa Cyprus, CFA, is conducting an analysis of inventory management practices in the

retail industry. She assumes the population cross-sectional standard deviation of inventory
turnover ratios is 20. How large a random sample should she gather in order to ensure a
standard error of the sample mean of 4?

A) 20.
B) 25.
C) 80.

Question #49 of 78 Question ID: 1456539

The central limit theorem states that, for any distribution, as n gets larger, the sampling
distribution:

A) approaches a normal distribution.

B) approaches the mean.
C) becomes larger.
Question #50 of 78 Question ID: 1456601

A study finds that stocks with low price-to-book-value ratios, using end-of-year stock prices
and book values per share, have positive abnormal returns in January on average. This study
most likely suffers from:

A) time-period bias.
B) look-ahead bias.
C) sample selection bias.

Question #51 of 78 Question ID: 1456592

An article in a trade journal suggests that a strategy of buying the seven stocks in the S&P
500 with the highest earnings-to-price ratio at the end of the calendar year and holding
them until March 20 of the following year produces significant trading profits. Upon reading
further, you discover that the study is based on data from 1993 to 1997, and the earnings-
to-price ratio is calculated using the stock price on December 31 of each year and the annual
reported earnings per share for that year. Which of the following biases is least likely to
influence the reported results?

A) Survivorship bias.
B) Look-ahead bias.
C) Time-period bias.

Question #52 of 78 Question ID: 1456578

Student's t-Distribution

Level of Significance for One-Tailed Test

df 0.100 0.050 0.025 0.01 0.005 0.0005

Level of Significance for Two-Tailed Test

df 0.20 0.10 0.05 0.02 0.01 0.001

18 1.330 1.734 2.101 2.552 2.878 3.922

19 1.328 1.729 2.093 2.539 2.861 3.883

20 1.325 1.725 2.086 2.528 2.845 3.850

A traffic engineer is trying to measure the effects of carpool-only lanes on the expressway.
Based on a sample of 20 cars at rush hour, he finds that the mean number of occupants per
car is 2.5, with a standard deviation of 0.4. If the population is normally distributed, a 95%
confidence interval for the number of occupants per car is:

A) 2.313 to 2.687.
B) 2.387 to 2.613.
C) 2.410 to 2.589.

Question #53 of 78 Question ID: 1456590

Which of the following is the best method to avoid data snooping bias when testing a
profitable trading strategy?

A) Test the strategy on a different data set than the one used to develop the rules.
B) Increase the sample size to at least 30 observations per year.
C) Use a sample free of survivorship bias.

Question #54 of 78 Question ID: 1456545

From a population with a standard deviation of 15, a sample of 25 observations is taken. The
standard error of the sample mean is:

A) 1.67.
B) 3.00.
C) 0.60.

Question #55 of 78 Question ID: 1456576

The average return on small stocks over the period 1926-1997 was 17.7%, and the standard
deviation of the sample was 33.9%. Assuming returns are normally distributed, the 95%
confidence interval for the return on small stocks next year is:

A) –48.7% to 84.1%.
B) 16.8% to 18.6%.
C) –16.2% to 51.6%.

Question #56 of 78 Question ID: 1456558

The range of possible values in which an actual population parameter may be observed at a
given level of probability is known as a:

A) degree of confidence.
B) significance level.
C) confidence interval.

Question #57 of 78 Question ID: 1456553

A statistical estimator is unbiased if:

A) the expected value of the estimator is equal to the population parameter.

B) the variance of its sampling distribution is smaller than that of all other estimators.
C) an increase in sample size decreases the standard error.
Question #58 of 78 Question ID: 1456560

A range of estimated values within which the actual value of a population parameter will lie
with a given probability of 1 − α is a(n):

A) α percent confidence interval.

B) α percent point estimate.
C) (1 − α) percent confidence interval.

Question #59 of 78 Question ID: 1456571

A sample size of 25 is selected from a normal population. This sample has a mean of 15 and
the population variance is 4.

Using this information, construct a 95% confidence interval for the population mean, m.

A) 15 ± 1.96(0.4).
B) 15 ± 1.96(0.8).
C) 15 ± 1.96(2).

Question #60 of 78 Question ID: 1456563

Which of the following statements about confidence intervals is least accurate? A confidence
interval:

A) expands as the probability that a point estimate falls within the interval decreases.
B) has a significance level that is equal to one minus the degree of confidence.
C) is constructed by adding and subtracting a given amount from a point estimate.

Question #61 of 78 Question ID: 1456533

Stratified random sampling is most often used to preserve the distribution of risk factors
when creating a portfolio to track an index of:
A) stocks.
B) corporate bonds.
C) alternative investments.

Question #62 of 78 Question ID: 1456596

A research paper that reports finding a profitable trading strategy without providing any
discussion of an economic theory that makes predictions consistent with the empirical
results is most likely evidence of:

A) data snooping.
B) a non-normal population distribution.
C) a sample that is not large enough.

Question #63 of 78 Question ID: 1456593

An analyst has compiled stock returns for the first 10 days of the year for a sample of firms
and estimated the correlation between these returns and changes in book value for these
firms over the just ended year. What objection could be raised to such a correlation being
used as a trading strategy?

A) Use of year-end values causes sample selection bias.

B) The study suffers from look-ahead bias.
C) Use of year-end values causes time-period bias.

Question #64 of 78 Question ID: 1456568

Fred's Correspondence College wants to construct a 90% confidence interval for the mean
starting salaries of its graduates. A sample of 100 recent graduates has a mean of $50,000
and a standard deviation of $30,000. Assuming the population of graduates' starting salaries
is normally distributed, the College's confidence interval is closest to:

A) $0 to $100,000.
B) $44,000 to $56,000.
C) $45,000 to $55,000.

Question #65 of 78 Question ID: 1456591

An analyst has reviewed market data for returns from 1980–1990 extensively, searching for
patterns in the returns. She has found that when the end of the month falls on a Saturday,
there are usually positive returns on the following Thursday. She has engaged in:

A) data snooping.
B) biased selection.
C) time period bias.

Question #66 of 78 Question ID: 1456594

A study reports that from 2002 to 2004 the average return on growth stocks was twice as
large as that of value stocks. These results most likely reflect:

A) look-ahead bias.
B) survivorship bias.
C) time-period bias.

Question #67 of 78 Question ID: 1456569

What is the 95% confidence interval for a population mean with a known population
variance of 9, based on a sample of 400 observations with mean of 96?

A) 95.706 to 96.294.
B) 95.118 to 96.882.
C) 95.613 to 96.387.
Question #68 of 78 Question ID: 1456586

Which of the following statements regarding confidence intervals is most accurate?

A) The lower the degree of confidence, the wider the confidence interval.
B) The higher the significance level, the wider the confidence interval.
C) The lower the significance level, the wider the confidence interval.

Question #69 of 78 Question ID: 1456526

Which of the following statements about sampling errors is least accurate?

Sampling error is the difference between a sample statistic and its corresponding
A)
population parameter.
Sampling error is the error made in estimating the population mean based on a
B)
sample mean.
Sampling errors are errors due to the wrong sample being selected from the
C)
population.

Question #70 of 78 Question ID: 1456582

Student's t-Distribution

Level of Significance for One-Tailed Test

df 0.100 0.050 0.025 0.01 0.005 0.0005

Level of Significance for Two-Tailed Test

df 0.20 0.10 0.05 0.02 0.01 0.001

30 1.310 1.697 2.042 2.457 2.750 3.646

40 1.303 1.684 2.021 2.423 2.704 3.551

60 1.296 1.671 2.000 2.390 2.660 3.460

120 1.289 1.658 1.980 2.358 2.617 3.373

From a sample of 41 orders for an on-line bookseller, the average order size is $75, and the
sample standard deviation is $18. Assume the distribution of orders is normal. For which
interval can one be exactly 90% confident that the population mean is contained in that
interval?

A) $70.27 to $79.73.
B) $74.24 to $75.76.
C) $71.29 to 78.71.

Question #71 of 78 Question ID: 1456535

An auditor who decides to handpick rather than randomly select transactions to examine for
instances of fraud is most likely using:

A) judgmental sampling.
B) convenience sampling.
C) cluster sampling.

Question #72 of 78 Question ID: 1456550

A traffic engineer is trying to measure the effects of carpool-only lanes on the expressway.
Based on a sample of 100 cars at rush hour, he finds that the mean number of occupants
per car is 2.5, and the sample variance is 0.16. What is the standard error of the sample
mean?

A) 0.04.
B) 5.68.
C) 0.016.

Question #73 of 78 Question ID: 1456544

The sample mean return of Bartlett Co. is 3% and the standard deviation is 6% based on 30
monthly returns. What is the confidence interval of a two tailed z-test of the population
mean with a 5% level of significance?

A) 2.61 to 3.39.
B) 1.90 to 4.10.
C) 0.85 to 5.15.

Question #74 of 78 Question ID: 1456534

To estimate the average time Level I CFA candidates spend preparing for the exam, an
employee of ABC Investments decides to randomly survey candidates who work at ABC's
offices, although he is unsure how well they represent the candidate population. This is
most likely an example of:

A) convenience sampling.
B) judgmental sampling.
C) stratified sampling.

Question #75 of 78 Question ID: 1456543

Joseph Lu calculated the average return on equity at 14% for a sample of 64 companies. The
sample standard deviation is 16%. The standard error of the mean is closest to:

A) 0.0200.
B) 0.0025.
C) 0.0175.

Question #76 of 78 Question ID: 1456548

The following data are available on a sample of advertising budgets of 81 U.S. manufacturing
companies: The mean budget is $10 million. The sample variance is 36 million. The standard
error of the sample mean is:

A) $1,111.
B) $667.
C) $400.

Question #77 of 78 Question ID: 1456572

The average U.S. dollar/Euro exchange rate from a sample of 36 monthly observations is
$1.00/Euro. The population variance is 0.49. What is the 95% confidence interval for the
mean U.S. dollar/Euro exchange rate?

A) $0.8075 to $1.1925.
B) $0.7713 to $1.2287.
C) $0.5100 to $1.4900.

Question #78 of 78 Question ID: 1456577

A sample of 100 individual investors has a mean portfolio value of $28,000 with a standard
deviation of $4,250. The 95% confidence interval for the population mean is closest to:

A) $27,575 to $28,425.
B) $19,500 to $28,333.
C) $27,159 to $28,842.