A survey is taken to determine whether the average starting salaries of CFA charterholders is equal to or greater than $54,000 per year. Assuming a normal distribution, what is the test statistic given a sample of 75 newly acquired CFA charterholders with a mean starting salary of $57,000 and a standard deviation of $1,300? A) 2.31. B) -19.99. C) -2.31. D) 19.99.
(54000-57000)/(1300/sqrt(75)) = -19.99
is that a z-statistic?
D) 19.99 is the answer. I see now. These quant questions make my patience extra thin…
Positive 19.99? Shouldn’t it be negative?
The Sample is 57k. The hypothesized value is 54k. Sample - Hypothesized ---------------------- Standard Deviation/N^.5 Z test since it is normally distributed with a known variance. T Test is only for non normal distributions with unknown variances and the sample is large OR the sample is small with normal distribution To jack my own thread, lets get a count of how many are studying this Friday/Saturday evening?
I just finished for the night–this is miserable. I definitely could not do this for more than another week. I’m starting to burn…
As a repeater, I can’t fail for a second time. I would be so humiliated. Also I have this week off, I better pass.
Ditch, I thought it was (Hypothesized Value - Mean)/STD DEV.
definately studying this saturday night/ along with… - option formulas (plus whole derivatives topic really lol) - duration + convexity going over - ifrs gaap reminder - M1/M2 - Tax stuff - correlation + portfolio stuff
chad17 Wrote: ------------------------------------------------------- > ditch, > > I always thought it was (MEAN-Hypothesized > value)/STD DEV. Now I am very confused. I see that is the equation on page 310 of Schweser book 1. But on page 305, it has the equation that I put. Perhaps the test statistic is for the sample statistic while the Z/T tests are for the mean statistic? (Sample - Hypothesized)/(Standard Deviation/N^.5 or Standard Error)
chad, i think for the z-statistic, the denomintaor is the standard error ditch, is that right?
Standard Error is correct. But, how are we suppose to know when to solve for the test statistic versus z/t statistic?
the Show, true, im concerned about the numerator though.
I dont have my Quant book on me right now, I’m at the library (on a friday night :)) studying Alt.Investments, so I can’t cross reference. Anyone else willing to shed some light?
Your answer: B was incorrect. The correct answer was D) 19.99. With a large sample size (75) the z-statistic is used. The z-statistic is calculated by subtracting the hypothesized parameter from the parameter that has been estimated and dividing the difference by the standard error of the sample statistic. Here, the test statistic = (sample mean – hypothesized mean) / (population standard deviation / (sample size)1/2 = (X − µ) / (σ / n1/2) = (57,000 – 54,000) / (1,300 / 751/2) = (3,000) / (1,300 / 8.66) = 19.99. Where is Joey? This is getting so frustrating.
the t stat and the z stat are calculated the same way, same formula just compared to a different T/Z calc respectively
i think jp is right. calculated same way. but for less than 30 n you use t. answer will be same as if you used z, but u are using a different chart. by the way, hows that gona work on the exam? will there be z tables and t tables on the exam in the back? just thought of chi squared and f tables—remember NOTHING about those haha
I know, dude, are you reviewing that? Has anyone come across them in ANY sample/mock exams? (Referring to chi-squared and f tables)
You’ll get a small sample of the tables you need for the question.