Page 77 - FINAL CFA I SLIDES JUNE 2019 DAY 3
P. 77
LOS 11.j: Calculate and interpret a CI for a
population mean, given a ND with 1) a known Session Unit 3:
PV, 2) an unknown PV, or 3) an unknown PV
and a large sample size, p258! 11. Sampling and Estimation
To work out CI (as point estimate for the population mean), you need to set level of significance (alpha = α = 5%), required
probability is 1 – α (= 95% = Degree of Confidence)
In general, CI = PE ± (RF × SE) Always α/2 = 2 tailed because CI we need lower and upper limit
where:
• PE = point estimate - value of a sample statistic of the corresponding parameter;
• RF = reliability factor – this depends on the sampling distribution of the PE & the p that the PE falls in the CI, (1 – α); and
• SE = standard error = of the PE
