Page 75 - FINAL CFA I SLIDES JUNE 2019 DAY 3

Session Unit 3:

LOS 11.i: Describe properties of Student’s 11. Sampling and Estimation
t-distribution and calculate and interpret its degrees of freedom, p255/256

Recall, Intelco, Inc, p133-136 Key Properties of students t-distribution, p.256
Its is a bell-shaped probability distribution that is symmetrical about its
mean

Intuition around fatter tails?

So what implications for say CI for t v z (last par, p 256)?

Check df = 1, df = 4 and df = 15:
Which shape looks more like a normal distribution (check RF graph for
Intelco)?

Lets interpret it:

You got 5 dresses and
love to change all week (M-F): First, what’s df?
How freely can you choose given SRS,
but this time without replacement? 4!
Why is df = n – 1?

So, interpretation?

Lets evaluate the t v z table!