Sample Statistics and Confidence Intervals | CFA® Level 1 Exam | Test Prep

Sample Statistics and Confidence Intervals

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A sample of size 600 is drawn from a population. The sample mean equals 329. The total width of the 99% confidence interval for the population mean is 893. The estimated population variance equals ________.

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C

If z is the z-value corresponding to the specified confidence level, the sample mean is M and the standard deviation is D in a sample size N, the confidence interval is specified as [M - z*D/sqrt(N), M + z*D/sqrt(N)]. Thus, the width of the interval equals 2*z*D/sqrt(N). In the present case, for the 99% confidence interval, the normal probability table gives z = 2.58. The sample standard deviation equals sqrt(893) = 29.88. Therefore, the width of the 99% interval is 2*2.58*29.88/sqrt

(600) = 6.30.

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