# The right formula for Z score

I have come across the two equation for z score.

1. Z = (x-u)/ std dev

2. Z = (x bar - u)/ std error of sample mean, std dev/ root n

what is the difference between this two and when to use? Many thx

Share this

# Study together. Pass together.

Join the world's largest online community of CFA, CAIA and FRM candidates.

Use the former when you’re creating a confidence interval for a single observation.

Use the latter when you’re creating a confidence interval for the mean of a number of observations, or performing an hypothesis test about a mean.

Simplify the complicated side; don't complify the simplicated side.

Financial Exam Help 123: The place to get help for the CFA® exams

http://financialexamhelp123.com/

The former one is for one population observation or one sample observation. While the latter one is for many observation ( sampling observation ). Did I get it right?

You did.

Simplify the complicated side; don't complify the simplicated side.

Financial Exam Help 123: The place to get help for the CFA® exams

http://financialexamhelp123.com/

Thank you so much, cheers!