Page 4 - FINAL CFA SLIDES DECEMBER 2018 DAY 4

Session Unit 3:

11. Sampling and Estimation

LOS 11.d: Distinguish between time-series and cross-sectional data, p.252

Time-series -data taken at specific and equally spaced time intervals.

Cross-sectional - data taken at a single point in time.

Longitudinal – data on multiple characteristics (GDP, Inflation) of the same entity over time.

Ormal
Panel -data on multiple characteristics (GDP, Inflation) of the multiple entities over time.

LOS 11.e: Explain the central limit theorem (CLT) and its importance.

Give a population with say: Repeated SRS (with replacement) produces a sampling distribution with:

Size = n • sample mean, x, approaching a normal pd with

Mean = µ; and • mean µ and

Finite variance = σ2 • variance = σ2/n What’s √variance?

As the sample size becomes large.

Regardless of the population’s distribution, as long as the sample size is “sufficiently

large,” (n ≥ 30), specific inferences about the population can be drawn!