Page 80 - FINAL CFA I SLIDES JUNE 2019 DAY 3
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Session Unit 2:
NOTES TO ANSWER: 8. Statistical Concepts and Market Returns
We use the t-reliability factor because the PV is unknown.
Since there are 30 observations, the df (n-1) = 30 – 1 = 29
Remember, because this is a 2-tailed test at the 95% CL, the p under each tail must be α/2 = 2.5%, for a total of 5%.
Thus, the 95% CI = –5.4% to +9.4%.
Which is more
Interpretation? conservative? Z or T?
We are 95% confident that the population
mean monthly return for McCreary stock is
between 5.4% and +9.4%.
Had we used Z?
