Point Estimate of Mean Annual Income | CFA Level 1 Exam Preparation

Point Estimate of Mean Annual Income

Prev Question Next Question

Question

An experiment involves selecting a random sample of 256 middle managers at random for study. One item of interest is their mean annual income. The sample mean is computed to be $35,420 and the sample standard deviation is $2,050. What is the point estimate?

Answers

Explanations

Click on the arrows to vote for the correct answer

A. B. C. D. E.

E

The sample mean is a good estimate for the population mean.

The point estimate refers to an estimate of a population parameter based on a sample statistic. In this case, the population parameter of interest is the mean annual income of all middle managers, and the sample statistic is the sample mean.

The given information states that a random sample of 256 middle managers was selected for study. The sample mean is computed to be $35,420, and the sample standard deviation is $2,050.

Since the sample mean is the point estimate for the population mean, the correct answer is the option that represents the sample mean. In this case, the sample mean is $35,420, so the point estimate is:

E. $35,420.

Therefore, the correct answer is option E.

Prev Question Next Question