FRM Part I · FRM Exam Part I · Sample Moments
An analyst observes 4 monthly returns (in %): 2, 4, 6, 12. Using the sample estimators, what is the standard error of the sample mean (in %)?
The standard error is about 2.16%, from s = 4.32 divided by √4.
- A1.22
- B2.45Correct
- C1.00
- D2.12
Explanation
Mean = 24/4 = 6. Squared deviations: 16+4+0+36 = 56. Sample variance = 56/3 = 18.667; s = 4.320. Standard error = s/√4 = 2.160. Checking options: none match 2.160 exactly, so recompute: 4.320/2 = 2.160, which is closest to 2.12 but not equal.
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