question # 14: to calculate the standard deviation, why divide by 3? For normal distribution, isn’t it 2.58 for 99%? why use 3 rather than 2.58?
2.58 is is 3 standard deviations away from the mean in the context of a normal distribution under the z-distribution. I don’t really remember the question, but it seems to me that is what you are probably looking for.
not really
As I remember they were asking something like: …The mean sales and std dev were _closest to_: And the difference in answers was large enough to get the right answer with 2.58
3 is an approximation for 2.58 Because CFA maybe doesn’t everybody to know 2.58 3 is close enough 3 sigma - rule = 99 % 2 sigma - rule = 95 % 1 sigma - rule = 68 %
I remember that question too. I was stumped… I really dislike the format of those sample tests. There is no way you get a realistic chance to assess the answers while you are thinking about the ticking clock on the page.