CFA CFA Level 1 Question of the Week – Quantitative Methods

Question of the Week – Quantitative Methods

  • This topic has 4 replies, 3 voices, and was last updated Apr-18 by AdaptPrep.
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  • AdaptPrep
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    An analyst samples random stocks from the market using the simple random sampling method. The first stock sampled returned 10% in 2012, and the mean 2012 return of the analyst’s entire sampled portfolio is 14%. If the market return in 2012 was 16%, the absolute value of the analyst’s sampling error is closest to:

    • 2%
    • 4%
    • 6%
    rsparks
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    It’s the difference between the same and the population right? I am assuming the market return would be the population

    fabian
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    *fist pump*

    AdaptPrep
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    The sampling error is the difference between the observed
    value and the value it was intended to represent. In this case, the observed
    value was the mean return, or 14%. The actual mean return was 16%, so the
    sampling error was 2%.

    AdaptPrep
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    Ignore comment.

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