Statistical Inference - CFA Level 1: Understanding the Process

Statistical Inference

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Question

"Statistical inference" refers to the process of:

Answers

Explanations

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A. B. C. D.

A

Note that statistical inference is always carried out with sample data, since you never have access to the entire population (if you did, you would no longer call it

"inference"!).

"Statistical inference" refers to the process of drawing conclusions or making inferences about a population based on information obtained from a sample. In other words, it involves using sample data to make statements or predictions about the larger population from which the sample was drawn.

Option A states that statistical inference involves drawing conclusions about the entire population based on the statistical characteristics of a sample. This is an accurate description of statistical inference. When conducting statistical inference, analysts examine a sample from a population and use the information gathered from the sample to make inferences or draw conclusions about the entire population.

Option B suggests that statistical inference involves drawing inferences about the characteristics of a distribution based on population data. This is not an accurate description of statistical inference. Statistical inference typically involves drawing inferences about the population based on sample data, not the other way around.

Option C states that statistical inference involves predicting the statistical characteristics of a randomly drawn sample based on the knowledge about the entire population. This is not an accurate description of statistical inference. The process of statistical inference focuses on using sample data to make predictions or draw conclusions about the population, rather than predicting the characteristics of a new sample.

Option D suggests that statistical inference involves selecting a probability sample and the statistical method used to analyze it. While selecting a probability sample is an important aspect of statistical inference, it does not encompass the entirety of the process. Statistical inference encompasses not only the sampling process but also the analysis and interpretation of the sample data to make inferences about the population.

Therefore, the correct answer is option A: "drawing conclusions about the entire population based on the statistical characteristics of a sample." This option accurately captures the essence of statistical inference, which involves using sample data to make inferences about the population from which the sample was drawn.