The book says, if the ‘n’ size is large enough, we can normally standardize nonnormal distribution.
I had known that the large means ‘n≥30’, but the book have not used the z-distributin.
Why I ask this question is the Kaplan 2015 lv1 note 297p’s example uses not z-distributin but t-distribution.
How much is enough?
The t-distribution is more conservative, but when n ≥ 30, the z-distribution is acceptable.
On the exam, you’ll use whichever distribution they give you.
s2000) Thank you for answering.~
My pleasure.
Same problem with the size of the sample
in B. the sample size is 40 which is greather than 30, and the t-statistic should be applied here according to the table below, am i right ?
I suspect that you’re missing the point of the question.
You would use a t-statistic if you had data about the earnings themselves. But here _ you don’t _ have data about the earnings themselves, you have data about analysts’ estimates of the earnings. The point is that you cannot create a confidence interval for some data when all you have is a bunch of guesses on those data (even if they’re educated guesses).
it’s all clear now
thank you
Good to hear.
My pleasure.