CFA Level I · CFA Level I Exam · Estimation and Hypothesis Testing
A sample of 64 independent observations is drawn from a population with a known standard deviation of 12. The standard error of the sample mean is closest to:
The standard error of the sample mean is about 1.50. It equals the population standard deviation of 12 divided by the square root of 64, which is 8. Dividing by 64 instead would wrongly give 0.19, and 12 ignores the sample size.
- A0.19
- B1.50Correct
- C12.00
Explanation
Standard error = σ/√n = 12/√64 = 12/8 = 1.50. The value 0.19 comes from dividing by n (12/64), and 12 ignores the sample size entirely.
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