CFA® Level 1 Exam: Invoice Sampling Method

Invoice Sampling Method

Prev Question Next Question

Question

Suppose we select every fifth invoice in a file. What type of sampling is this?

Answers

Explanations

Click on the arrows to vote for the correct answer

A. B. C. D. E.

D

One of the ways to conduct systematic sampling is to have a rule for picking the sample in an unbiased way. Selecting items at specified intervals can achieve this.

The type of sampling described, where every fifth invoice is selected from a file, is known as "Systematic Sampling."

Systematic sampling is a probability sampling method in which elements in a population are selected at regular intervals, often with the first element selected randomly. In this case, the invoices are ordered in a file, and every fifth invoice is chosen.

Let's compare this sampling method with the other options:

A. Random Sampling: In random sampling, each element in the population has an equal chance of being selected. However, in systematic sampling, the selection is not random but follows a systematic pattern.

B. None of these answers: Since the sampling method can be identified as systematic sampling, this option is not correct.

C. Cluster Sampling: Cluster sampling involves dividing the population into groups or clusters and selecting entire clusters at random. However, in the given scenario, individual invoices are selected, rather than clusters, so cluster sampling is not the correct answer.

D. Systematic Sampling: As mentioned earlier, systematic sampling is the correct answer. It involves selecting elements at regular intervals from an ordered list or population.

E. Stratified Sampling: Stratified sampling involves dividing the population into homogeneous subgroups called strata and then randomly selecting elements from each stratum. However, in the given scenario, there is no mention of dividing the invoices into distinct subgroups based on any specific characteristics, so stratified sampling is not applicable.

To summarize, the correct answer is D. Systematic sampling, as every fifth invoice is selected from the file at regular intervals.